Among individual stocks, Tata Steel, Steel Authority of India (SAIL), and Jindal Steel and Power (JSPL) slipped 5 per cent each, while Coal India, National Aluminium Company, NMDC, Vedanta, and JSW Steel from these indices were down 2 per cent to 4 per cent.
At 02:51 pm, Nifty Metal index was down 3 per cent and S&P BSE Metal index 3.7 per cent. In comparison, the Nifty50 and S&P BSE Sensex were down 0.86 per cent and 0.71 per cent, respectively. With today’s decline, the S&P BSE Metal index has now corrected 10 per cent from its record high level of 20,429, touched on May 11, 2021.
Copper prices capped downside on supply concerns from Chile. Base metals pared gains on demand growth concerns after China signalled to take action to curb rising inflation.
Chinese aluminum smelters are facing environment-led production restrictions whereas capacity cap is limiting future additions. With strong sequential demand recovery, global utilization has reached a decade high, has limited spare capacity and thin pipeline of fresh additions.
“While volume loss from these restrictions are not significant (<0.5 per cent impact on annual volumes), it adds to the already deficit market and raises risk of future restrictions and similar actions by other provinces. China would be reaching its 47 mtpa capacity cap after a 2.2 mtpa addition in CY2021E. The government appears committed to reduce emissions and unlikely to raise the cap. We estimate that China market would remain in deficit over CY2021-25E,” analysts at Kotak Securities said in metal & mining report.
The brokerage firm increased its aluminum price assumptions by 30 per cent/19 per cent to $2,300/2,150/2,200/ton for FY2022/23/24E respectively albeit lower than spot at $2,500/ton, factoring the near-term demand momentum, increasing restrictions in China and upcoming deficit market assumption.
To read the full story, Subscribe Now at just Rs 249 a month
Already a subscriber? Log in
Subscribe To BS Premium
₹249
Renews automatically
₹1699₹1999
Opt for auto renewal and save Rs. 300 Renews automatically
₹1999
What you get on BS Premium?
- Unlock 30+ premium stories daily hand-picked by our editors, across devices on browser and app.
- Pick your 5 favourite companies, get a daily email with all news updates on them.
- Full access to our intuitive epaper - clip, save, share articles from any device; newspaper archives from 2006.
- Preferential invites to Business Standard events.
- Curated newsletters on markets, personal finance, policy & politics, start-ups, technology, and more.
Need More Information - write to us at assist@bsmail.in