Metal sector: Investors should brace for a difficult Q2; H2 could be better

Metal spreads may not yet have bottomed out with guidances indicating Q2' FY 2022-23 may see lower profitability

The global industrial metals scenario has been extremely confused since the Russia-Ukraine war. We have seen both cuts in supply and also falling demand. The new equations are not yet clear.
 

On the one hand, supplies from Ukraine and Russian have been disrupted. On the other hand, China lockdowns have led to both cuts in production as well as a drop in demand -  weak GDP numbers and a real estate slowdown means demand is more affected.
 

Since Europe has been hit by energy shortages and soaring energy prices, many European Union (EU) smelters have shut. One silver lining is