The market valuation of the metals sector firms surged 194 per cent (Rs 47,583 crore) in the current bull run, between April 1, 2003 and November 24.
In the metals segment, non-ferrous metals, and integrated steel and aluminium companies posted the biggest gains in market capitalisation.
Composite steel stocks showed a gain of Rs 23,477 crore in market capitalisation, aluminium Rs 11,001 crore and non-ferrous metals Rs 8,989 crore.
Analysts are positive on the metals sector on the back of sturdy economic fundamentals and a good monsoon, coupled with a favourable supply situation.
Going forward, analysts see growth coming from an improvement in operational efficiencies and product mix, from higher volumes and from companies moving up the value chain. There is some upside for both steel and aluminum prices even in the short term.
In the wake of surging input costs, reduction in inventory levels and growing consumption in China, global steel prices are once again looking up.
Some capacity rationalisation is also on the cards considering that metallurgical coal and scrap prices are still high.
The factors holding back the sector will be an additional 10 million tonne capacity coming up towards the end of the year and the possibility of dormant capacities in the United States again coming onstream.
Analysts see steel prices touching $350-$360 per tonne for HR coil towards the later part of 2003-04.
