Metal Stocks Outlook for the week – 06 to 10.06.2016
(Seen in range; govt mulling financial
package)
( www.rupeedesk.in )
Shares of major metal and mining companies are seen trading in a
range next week due to lack of sector-specific triggers. Despite some correction in
global steel prices in May, domestic prices remained stable during the month.
After unprecedented rally in global steel prices, primarily driven
by China, during March and April, the month of May saw a well expected
correction...Domestic prices, however, have been stable. The steel ministry has prepared a draft
of recommendations on a comprehensive package for domestic steel companies, and will
send it to the Prime Minister's Office for approval soon.
The recommendations include reviewing trade pacts and formulating
a scheme to reduce the additional burden of the clean environment cess, which
was doubled to 400 rupees per tn in the Union Budget for 2016-17 (Apr-Mar). Banking
sources, however, say that the financial revival package is unlikely to extend
across-the-board help to the ailing steel sector, as lenders maintain a cautious stance.
Banks will seek to help these companies on a case-by-case basis
because significant chunk of fresh slippages in the current financial year are
expected to come from iron and steel accounts. The package will be yet another support
provided by the government to revive the domestic steel sector, which is
struggling with weak demand, cheap imports and mounting
debt.
