Metal Stocks
Outlook for the week – 20 to 24.07.2015
(Seen down in next week Hind Zinc
Apr-Jun results eyed)
( www.rupeedesk.in )
Stocks of major metals companies
are seen down in the upcoming week owing to low commodity
prices, and sluggish earnings
outlook.
Growing supply glut in the
market, and poor demand for most metals, particularly steel, in the
world's largest metal producer
and consumer--China--has led to metal prices dwindling globally.
This is a difficult time for the
steelmakers since no industrial recovery is seen. Our outlook for 2015-
16 would remain weak for the
sector. However, there could be a rebound in terms of prices in the
last quarter after sustained fall
in prices.
However, we remain positive on
JSW Steel on a relative basis as the improved domestic iron ore
supplies, highly efficient
operations and soft iron ore/coking coal prices would significantly
compensate for the fall in steel
prices for JSW Steel, contrary to integrated players, SAIL, Tata
Steel.
The market would also eye shares
of Hindustan Zinc Ltd, as the company will announce its Apr-Jun
results on Monday. Hindustan
Zinc's volumes are expected to go down, which is likely to negatively
affect its bottomline.