Metal and Mining share price target

HRC prices in the traders’ market have inched lower WoW, particularly in east and west India. In longs, however, primary rebar prices remained stable while secondary rebar prices edged up WoW.

The steel industry's performance in Q2FY23 was weaker than expected due to the imposition of export duty on steel in May this year. A global decline in steel prices and higher input costs only added to its woes.

HRC price in traders’ market remained broadly unchanged compared to last week as domestic prices remain at ~12% premium to landed price of imports.

Sector Update: Steel

We believe the Government of India’s (GoI) decision to roll back the duties imposed
on ferrous and stainless steel products in May-22 (Link) is a welcome step. However, due to the falling steel demand and low prices, globally, the benefits are likely to be marginal.

Q2FY23 is likely to see a dip in profitability across the metals & mining companies under our coverage – owing to the double whammy of lower realisations and cost woes.

Metals & Mining Q2FY23 Results Preview

Global steel spreads saw sharp compression in Q3CY22, per MT. We expect Indian steel margins to bottom out in the Sep quarter