Metal Stocks Outlook for the week – 08 to 12.02.2016
(Up
as govt may levy floor price on steel import)
Shares
of major metals and mining companies are seen trading with a
positive
bias next week on the likely announcement of minimum import
Price
a non-tariff trade barrier on steel products by the government to
help
the cash-strapped industry. According to sources, the Centre is likely
to
notify a minimum import price to be levied on all carbon products.
The imposition of the floor price on select steel products would be yet
another
step by the government to curb rising imports from countries like
China,
South Korea, Japan, and Indonesia, particularly at a time when
domestic
demand is tepid.
The
steel companies continued to show disappointing results for the
quarter
ended December, with Tata Steel posting a consolidated net loss
of
21.3 bln rupees for Oct-Dec.
The
safeguard duty has not been able to offset the decline in prices which
has
impacted the domestic producers and reduced their profitability. On
Sep
14, the government had announced a safeguard duty of 20% on
import
of hot-rolled flat products of non-alloy and other alloy steel with a
width
of 600 mm or above for a period of 200 days.
However,
since steel prices have risen in the last one-month, some
domestic companies can hope for a better quarter.