Metal stocks likely to underperform broader market during H2 2021

The dollar-denominated hot rolled steel prices in China are up 27 per cent in 2021 against 13.4 per cent rise in S&P 500 index, but some analysts are turning cautious

The rally in industrial metal prices, especially steel, has proved to be more durable than thought initially. The London Metal Exchange Index (LMEX) that tracks the prices of non-ferrous metals continues to outperform the S&P 500 stock index - the bellwether of global equity markets - despite some weakness in recent weeks.

Similarly, steel prices in China - the world's top metal producer and consumer  - remain stubbornly high. The prices of hot rolled (HR) steel in China are up 7 per cent in July and are close to May's high.

The HR steel prices in China and priced in