Brokerage and research firm Edelweiss believes that demand recovery remains crucial in the steel industry. Rebar and HRC prices remain low MoM despite the government’s promise to drive growth. Moreover, higher steel and alloy exports are likely to keep the global prices of these commodities in check.
Brokerage said it is cautious about ferrous space with Shyam Metallics 353) As the only ‘Buy’ in the metal sector. metal stock It is down more than 22% since its listing in June last year.
“China reported a record trade surplus, mainly on export shipments made. Key Points: Refined copper imports up 9% YoY on favorable SHFE-LME arbitrage, iron-ore imports up 3% YoY to 91mt as traders look at potential for rebars from government’s infrastructure-targeted stimulus measures Weighed by demand recovery, al exports remain firm, steel exports remained elevated despite weak demand from Vietnam and other regions of Southeast Asia.”
The brokerage house said it expects the stalled share of exports to come down as demand outlook picks up in the rest of the world. It remains watchful of the iron spot due to the twin troubles of high export volumes and low prices from China.
“China’s surprisingly strong trade data comes against a backdrop of strong production (especially Al) and declining consumption, stemming from the stringent zero-tolerance COVID-19 policy. We expect exports to decline as demand remains low in the rest of the world.”
That said, strong steel (despite the decline in production) and al exports is cause for concern. While regional steel prices are already at their lowest level since November-20, LME Al prices also remain range bound, as according to Edelweiss, ~10% of global Al demand is being met by exports from China. Used to be.
The views and recommendations given above are those of individual analysts or broking companies and not of Mint.
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