Metal Stocks Outlook for the week – 15 to 18.11.2016

Metal Stocks Outlook for the week – 15 to 18.11.2016

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Stocks of major metal and mining companies are seen trading with a positive bias next week,

tracking the rise global prices of metals. Though the broader markets will likely witness volatility

next week, the Nifty Metal index is expected to outperform.

Earlier this week, stocks of metal companies had risen tracking the surge in global metal prices

following president-elect Donald Trump's promised to spend a significant amount of money on

building infrastructure in the US, indicating a $500-bln spend. Following the speech, prices of

copper, aluminium, and zinc surged overnight on hope of a likely rise in demand.

Trump is also likely to impose higher tariffs on imports from China, which is seen as beneficial for

metal companies in countries like India. Market participants would be eyeing any development

related to imposition of anti-dumping duty on colour-coated steel products.

Anti-dumping duty is a trade barrier that would protect the local steel makers from cheap imports

coming from China and South Korea. Steel companies are trying to hike prices as coking coal prices

trebled in last couple of months. Poor demand scenario thus can be a

spoilsport in this regard. Flat product prices (of steel) were recently hiked, however, there is

expectations of discounts in light of weak demand. In that case, we expect stronger margin

contraction in next two quarters. Markets will remain shut Monday on account of Guru Nanak

Jayanti.

Metal Stocks Outlook for the week - 24 to 28.10.2016 (Seen consolidating; JSW Steel, Vedanta eyed)

Metal Stocks Outlook for the week - 24 to 28.10.2016

(Seen consolidating; JSW Steel, Vedanta eyed)

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The shares of major metal and mining companies are seen consolidating next week

following gains made over the last few trading sessions. The Nifty Metal index can

move up to 2722 points, pegging support at 2605 points.

Market participants would be eyeing shares of JSW Steel as the company will detail

Jul-Sep quarter's results on Thursday. JSW Steel is seen posting a consolidated net

profit of 8.30 bln rupees in the quarter ended September compared with a profit of

11.09 bln rupees in Apr-Jun. Consolidated net sales of the steelmaker are seen at 126.45

bln rupees. Vedanta will post Jul-Sep earnings on Friday. The company's bottomline is

seen at 9.63 bln rupees during the quarter under review compared with a 6.15-bln-rupee

profit in Apr-Jun.

Vedanta's consolidated net sales are seen at 155.36 bln rupees in Jul-Sep. Shares of

Hindalco are expected to fall a bit and may touch 146 rupees. Shares of JSW Steel are

seen consolidating next week, he said. The stock is likely to trade between 1,660 rupees

and 1,773 rupees. Shares of Vedanta may also consolidate next week, the analyst said.

He pegged the stock's resistance at 208 rupees and support at 196 rupees.

Metal Stocks Outlook for the week – 17 to 21.10.2016

Metal Stocks Outlook for the week – 17 to 21.10.2016

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Stocks of major metal and mining companies are likely to be subdued next week, following

the uptrend in these stocks in the past few trading sessions. A short-term reversal in trend

in seen (among metal stocks) after the recent rally. The Nifty Metal index, he said, could rise

to 2722 points, with the possibility of facing a downside of 2578 points.

We expects the strong momentum in the earnings of metals and mining companies to

continue in the quarter ended September. Realisations of steel producers in Jul-Sep are

expected to be soft due to subdued demand and uncertainty regarding a few government

policies. Hindustan Zinc would deliver strong earnings despite lower zinc volumes, led by

higher zinc prices.

Metal Stocks Outlook for the week – 03 to 07.10.2016 Correction in major stocks likely to continue

Metal Stocks Outlook for the week – 03 to 07.10.2016

Correction in major stocks likely to continue

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Stocks of major metal and mining companies may continue to see correction in the coming week.

Stocks of major metal companies fell 1.5%-7.7% this week. In the last week, the index had risen

3.7%. It has risen 32.3% since April. Stocks would also track the Reserve Bank of India's monetary

policy and the geo-political situations. While concerns of border tension with Pakistan are still on

investors' minds, it is expected to calm next week. The RBI will detail its monetary policy on Tuesday at 1430 IST. Market participants would be eyeing any development related to imposition of antidumping duty on certain steel products.

The government may further prune the list of steel products under minimum import price and instead

levy anti-dumping duty on them, Steel Secretary Aruna Sharma had said two weeks back. The

government had imposed minimum import price on 173 steel products in February for six months. On Aug 4, the government removed minimum import price for 107 specific items, and simultaneously imposed anti-dumping duty on broader categories of hot-rolled and cold-rolled products. It is difficult to give stock-specific estimate. If the (metal) stocks consolidate then it is good. But we have to wait and see how the stocks move.

Metal Stocks Outlook for the week – 06 to 09.09.2016 Minor correction seen; SAIL, Jindal Steel eyed

Metal Stocks Outlook for the week – 06 to 09.09.2016

Minor correction seen; SAIL, Jindal Steel eyed

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A minor correction may be on the cards for stocks of major metal and mining companies in the

coming week, after stocks rebounded in the last few trading sessions. However, overall, the sector

looks positive. At the fundamental level, an increase in international prices of iron ore, steel and zinc

is somewhere reflected in these stocks. Market participants would keep a close watch on shares of

Steel Authority of India and Jindal Steel and Power as the companies will detail their Apr-Jun

earnings on Sep 8. Weighed by plummeting realisations, higher depreciation and interest costs, SAIL

is seen posting a net loss of 11.52 bln rupees for the quarter ended June.

The company's net sales are expected to rise 7% on year to 100.33 bln rupees in Apr-Jun. Jindal

Steel is seen reporting consolidated net loss of 4.88 bln rupees for Apr-Jun due to higher depreciation

and interest cost. The steel-to-power company's consolidated net sales are expected at 46.81 bln

rupees. Stocks of Tata Steel, SAIL and Jindal Steel may outperform the Nifty Metal index in the shortrun. Tata Steel looks very positive despite some correction next week. A 30% upside is seen (for

SAIL's shares) in the next quarter.

Metal Stocks Outlook for the week – 29.08.2016 to 02.09.2016 (Stocks to rebound, seen positive next week)

Metal Stocks Outlook for the week – 29.08.2016 to 02.09.2016

(Stocks to rebound, seen positive next week)
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Stocks of major metal and mining companies are seen rebounding next week after the

consolidation in the last few successive trading days. Overall, the Nifty Metal index is

seen positive, adding that its important support is seen at 2430 level. The index is seen

scaling up to 3200 points in the long run if it crosses the 2650 level. No weakness is

seen in the short run.

At a fundamental level, there has been no sharp movement in stocks mainly due to lack

of sector as well as company specific news. Among stocks, Tata Steel may

underperform among its peers as it has the maximum weightage in the Nifty Metal

Index.

Metal Stocks Outlook for the week – 01 to 05.08.2016 (May fall on profit booking next week)

Metal Stocks Outlook for the week – 01 to 05.08.2016

(May fall on profit booking next week)

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The Stocks of major metal and mining companies are seen correcting downward next week as they

have been overbought in the last few sessions. The chances of profit booking is high correction to the

extent of 2250-2300 points is seen (in case of Nifty Metal index) and the immediate resistance of the

index at 2500 points.

Investors would be eyeing any decision on extension of minimum import price of steel products,

which is set to expire on Aug 5. The government had on Feb 5 imposed minimum import price on 173 steel item lines for six months, to protect the companies from cheap imports coming into the country from China, South Korea, and Japan. The decision is crucial for domestic steelmakers as they were facing predatory pricing from global exporters.

Steel Minister Chaudhary Birender Singh on Thursday asked the industry to prepare a "roadmap" to

become competitive in the international market even if the minimum import price on steel products is

extended after its expiry in August.

Metal Stocks Outlook for the week – 25 to 29.07.2016 (Seen in narrow range; JSW Steel, Vedanta eyed)

Metal Stocks Outlook for the week – 25 to 29.07.2016

(Seen in narrow range; JSW Steel, Vedanta eyed)

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Stocks of major metal and mining companies are seen trading in a narrow range next week, in line

with the trend in the broad market.A technically support for the Nifty Metal index at 2300

points and resistance at 2500 points.

A 15% upmove is seen if it (Nifty Metal index) breaks 2500 (points) that a 10-15% decline could be

there if the index slips below 2300. However, the overall structure remains positive.

Investors would be eyeing shares of JSW Steel and Vedanta as the companies would post their Apr-

Jun earnings on Wednesday and Friday, respectively. JSW Steel is expected to report a robust

consolidated net profit of 6.69 bln rupees during the quarter ended June as against a loss of 1.07 bln

rupees in the same period a year ago, according to estimates. Investors would also be eyeing the final

findings of the anti-dumping and countervailing probe on various steel products.

Earlier this week, Steel Secretary Aruna Sundararajan said the government may reconsider extending

minimum import price on steel products if long-term trade barriers such as anti-dumping duty and

countervailing duty are in place by August. Sundararajan also said the minimum import price was an

interim measure to stem shipments, adding that measures such anti-dumping duty, if levied, would

stay for a longer period.

On Feb 5, the government had imposed minimum import price on 173 steel items for six months to

protect the domestic industry from cheap imports from countries such as China, South Korea, and

Russia.

Metal Stocks Outlook for the week – 18 to 22.07.2016 (Seen trading with positive bias next week)

Metal Stocks Outlook for the week – 18 to 22.07.2016

(Seen trading with positive bias next week)

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Stocks of major metal and mining companies are seen trading with a positive bias next week, with

markets eyeing for cues from Apr-Jun earnings and improvement in the outlook for base metals. Focus will be on shares of Hindustan Zinc, which will announce its Apr-Jun earnings on Wednesday.

Steel companies' realisations are seen improving in the quarter due to the imposition of the minimum

import price. Steel prices maintained their MIP (minimum import price) led support (although have

come under pressure lately, which we believe is more of a seasonal factor), up 10% on quarter.

Hindalco Industries and JSW Steel remain the top picks.

Metal Stocks Outlook for the week – 11 to 15.07.2016

Metal Stocks Outlook for the week – 11 to 15.07.2016

(Seen positive next week; Tata Steel eyed)

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Stocks of major metal and mining companies are seen trading higher next week, tracking prices of

metals in the global markets, and on expectations that the Centre will impose certain measures to

protect domestic steel and aluminium companies.

Earlier this week, Steel Secretary Aruna Sundararajan said that the steel ministry in its proposal to the

Prime Minister's office has sought an extension of minimum import price on steel products beyond

Aug 5.

The government had on Feb 5 imposed the tariff measure on 173 steel item lines, in the range of $341- $752 per tn, for six months to curb cheaper imports from China, Japan, Korea, and some other

countries.

Mines Secretary Balvinder Kumar on Tuesday said the ministry has asked aluminium makers to make

representations, seeking to increase the import duty on primary aluminium products by another 250-

500 basis points. The Union Budget 2016-17 (Apr-Mar) had increased import duty on primary

aluminium products by 2.5 percentage points to 7.5%.

Stocks of Tata Steel will be eyed next week as the company will reportedly hold a board meeting

today to decide on the sale of its UK business. According to a BBC report, the company may

announce a halt on the sale of one of its units in its UK business.

Metal Stocks Outlook for the week – 04 TO 08.07.2016 (Seen falling next week on profit booking)

Metal Stocks Outlook for the week – 04 TO 08.07.2016

(Seen falling next week on profit booking)

 ( www.rupeedesk.in )

The stocks of major metals and mining companies may see profit booking next week after gaining in the current week following a surge in prices of metals, particularly copper and aluminium. In the near term, base metal prices may see some volatility after the recent decision of Britain to exit from the European Union.

The changes in investor sentiment as well as weak growth in the euro zone may dampen non ferrous metal prices. However, in our view, Brexit is unlikely to have a significant impact on India's nonferrous metal sector, since the region's share in global base metal consumption has been limited. On long-term demand of base metals in India remains positive. The positive is driven by investments in infrastructure projects for the power transmission and distribution sector, urban housing, and smart city programmes.

Metal Stocks Outlook for the week – 27.06.2016 to 01.07.2016, Volatile next week; JSW Steel, Hindalco seen up

Metal Stocks Outlook for the week – 27.06.2016 to 01.07.2016, Volatile next week; JSW Steel, Hindalco seen up

( www.rupeedesk.in )

Stocks of major metal and mining companies are seen volatile next week after the UK voted to leave

the European Union. Nifty metal index yesterday ended at 2,086.50 rupees on the National Stock

Exchange, down 3.8%, while most metal stocks plunged 1-7%. Prices of industrial metals such as

iron ore, copper and aluminium fell sharply yesterday on risk aversion as economic uncertainty

dented demand outlook for commodities, along with currency fluctuations. While the major impact of

UK's decision to leave the EU was absorbed yesterday, Indian equities markets could still continue to

be in a correction mode over the next couple of weeks. Metal stocks may witness a slump for a day

or two in the upcoming week. However, they may trade positive for the rest of the week.

The initial downward correction would be there as it is difficult to comprehend how and when the

currency would stabilise. He attributed the anticipated correction to the rise in commodity prices such

as crude oil, coffee, metals, globally. JSW Steel, Hindalco Industries and Vedanta are the top picks

for the sector and are likely to witness a rally. Stocks of Tata Steel would be eyed as the steelmaker

has substantial exposure to Europe, with 30% of Tata Steel UK's products sold in Europe. Britain's

exit from the European Union looks negative (for the company) initially...difficult to understand how

currency will be settled. Brexit was just another trigger for the downgrade. No major impact would 

be seen on Hindalco since the company does not have any direct exposure to the UK.

Metal Stocks Outlook for the Week - 20 to 24.06.2016 Likely to track broader market next week

Metal Stocks Outlook for the Week - 20 to 24.06.2016

Likely to track broader market next week

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Stocks of major metal and mining companies are seen tracking the broader market next week, ahead of Thursday's referendum in Britain's on whether to stay in or leave European Union. Investors may avoid riskier assets ahead of the referendum, which may weigh on metal prices and broader equities. Investors would be eyeing stocks of Tata Steel Ltd as the planned sale of its Port Talbot plant at Wales has been delayed after the steelmaker asked the potential buyers for more details on their roadmap for the site. The delay implies the final decision on the fate of the plant that employs around 4,000 workers would not be taken until July.

According to reports, Tata Steel, the company is exploring reversal of a decision to sell its UK business due to pressure from the referendum-bound UK government. The UK government is said to believe that Tata Steel's exit will reflect badly on the country's business environment. However, sale of the UK business is essential for Tata Steel to trim losses and cut debt. On the technical front, metal stocks are likely to trade with a positive bias and are likely to witness a bounce back. However, the referendum in the UK would be keenly watched.

Metal Stocks Outlook for the week – 13 to 17.06.2016 (Seen up next week; Hindalco to lead gains)

Metal Stocks Outlook for the week – 13 to 17.06.2016

(Seen up next week; Hindalco to lead gains)

( www.rupeedesk.in )

The shares of major metal and mining companies are seen trading with a positive bias next week due to a rise in base metal prices. The trading, however, will be stockspecific. In the coming week, shares of Tata Steel Ltd may remain subdued and trade in the range of 325-348 rupees. Yesterday, the stock ended down 2% on reports that the company is exploring reversal of a decision to sell its UK business due to pressure from the referendum-bound UK government.

The UK government is said to believe that Tata's exit will reflect badly on the country's business environment. Sale of the UK business is essential for Tata Steel to trim losses and cut debt. Hindalco Industries remains a top pick, as the company's primary aluminium operations are recording a strong performance despite depressed prices on the London Metal Exchange, while copper remains stable and profitable.

The Indian steel sector has been under pressure due to rising imports from China, Japan and Korea. Recently, however, the sector received a boost in the form of minimum import price, which seeks to restrict cheap imports, especially from China and members of the Commonwealth of Independent States.

Metal Stocks Outlook for the week – 06 to 10.06.2016 (Seen in range; govt mulling financial package)

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.

Metal Stocks Outlook for the week – 09 to 13.05.2016 May rise next week; Tata Steel remains in focus

Metal Stocks Outlook for the week – 09 to 13.05.2016

May rise next week; Tata Steel remains in focus

 ( www.rupeedesk.in )

Stocks of major metal and mining companies are seen trading slightly up next week following reports that the government is looking at creating a fund under India's first sovereign wealth fund to cater to the capital requirements of domestic steel companies. In December, the government created the 400-bln-rupee National Investment and Infrastructure Fund as an investment vehicle to fund greenfield, brownfield and stalled projects that are commercially viable.

Traders would continue to eye shares of Tata Steel next week as the UK government has said that it

will help Tata Steel shortlist serious buyers for their UK operations. Till now, Sanjeev Gupta-led

Liberty House and management buyout vehicle Excalibur Steel have submitted their letter of intent to purchase the company's UK assets. In positive news for the sector, National Aluminium Co was

allotted coal blocks Utkal-D and Utkal-E in Odisha by the government and will have all the rights,

titles, and interest in and over the land of both mines.

Metal Stocks Outlook for the week – 02 to 06.05.2016 Seen up next week; Tata Steel in focus

Metal Stocks Outlook for the week – 02 to 06.05.2016

Seen up next week; Tata Steel in focus

 ( www.rupeedesk.in )

Stocks of major metal and mining companies are seen trading up next week due to improved outlook following reports that the government is considering a comprehensive package for the sector that has been struggling for more than a year. According to reports, Minister of State for Steel and Mines Vishnu Deo Sai said that even though the government is not devising a bailout plan for the sector which has been struggling for more than a year, it is considering working out a comprehensive package for the sector.

Traders would continue to eye stocks of Tata Steel next week as the company's UK operations' Chief

Executive Officer Bimalendra Jha said on Thursday that the company cannot "continue to bleed" and

is looking to get out of the country as soon as possible. Jha said that the company needs to resolve

first the pension liability issue with some help from the government as there will be no buyer for its

operations in UK till this problem is resolved.

According to media reports, the UK government is working with the pension scheme trustees at Tata

Steel to reduce the impact on any buyer, and also considering the possibility to separate the scheme

from the business. Another company that would be under watch is mining major Vedanta which reported its Jan-Mar earnings on Thursday. Despite a loss of 111.81 bln at consolidated level, the

company reported a net profit of 9.5 bln rupees before exceptional item. The earnings were dragged

down mostly on account of one-time impairment charges of 123.12 bln rupees during the quarter

that mainly comprised the 100.74-bln-rupee impairment of goodwill created on acquisition of Cairn

India.

Metal Stocks Outlook for the week – 18 to 22.04.2016

Metal Stocks Outlook for the week – 18 to 22.04.2016

 ( www.rupeedesk.in )

Stocks of major metal and mining companies are expected to trade with a positive bias next week, taking cues from the broader market. The Nifty 50 last trading day ended at

7850.45 points, up 1.8%, boosted by India Meteorological Department's forecast of an

above-normal southwest monsoon this year, strong industrial growth in February, and a

benign Consumer Priced Index-based inflation print for March.

The overall sentiment on the sector has improved in the last two months after the government imposed various protectionist measures--minimum import price, safeguard

duty, quality control order, and initiation of anti-dumping probe--for the steel sector. Apart from an uptick in global steel prices, imposition of a minimum import price has

given enough room to domestic manufacturers to raise product prices. The benefit of the price rise will reflect on companies' earnings during Apr-Jun.

Hyderabad-based mining major NMDC Ltd will be able to raise prices of iron ore, aided by a surge in the commodity's prices in international markets. According to a report by Business Insider, iron ore prices have surged 36% in 2016, and are at their highest level since Mar 8 at $59.22 a tn.

Tata Steel will continue to remain in focus, as the company is looking to sell its operations at Port Talbot in the UK. Late last month, the company announced it was

looking to sell its UK assets in parts, as a bleak outlook for the global steel market had

made the business unviable. On Monday, Tata Steel UK said it will sell its European

long products business to Greybull Capital LLP

Metal Stocks Outlook for the week – 11 to 15.04.2016 (Bias positive; Tata Steel to remain in focus)

Metal Stocks Outlook for the week – 11 to 15.04.2016

(Bias positive; Tata Steel to remain in focus)

 ( www.rupeedesk.in )

Shares of major metal and mining companies are seen trading with a positive bias next

week on improved outlook for the sector, while Tata Steel is expected to remain in

focus as it will begin a formal sale process for its loss-making UK business on Apr 11.

Increase in global iron ore prices is expected to benefit domestic steel producers with

integrated plants, as they will have an edge over competitors having to purchase raw

material from other companies.

The overall sentiment towards the sector has improved in the last one month, and steel

prices have improved since the imposition of minimum import price on cheap imports

from China, South Korea and Japan, among others. On Wednesday, Tata Steel Chairman Cyrus Mistry, in a meeting with UK's Secretary of State for Business Sajid Javid, said the company will look at selling its UK assets in parts, if it can't find a buyer for the whole business, a media report said.

Although the sale of UK operations is seen as a positive for the company as it is a lossmaking

business, a probe by UK government's Serious Fraud Office concerning false certification, detailing Tata Steel's products might dent the company's prospects.

Steel Secretary Aruna Sundarrajan has said as the financial health of the sector has

improved, it was unlikely to get monetary aid, which was earlier under consideration.

However, in a negative, JSW Steel and Steel Authority of India's long-term issuer

ratings were downgraded recently by Fitch Ratings on account of loss of profitability,

and deterioration of financial profile, respectively.

Metal Stocks Outlook for the week – 04 to 08.04.2016 Range bound; Tata Steel to be in focus

Metal Stocks Outlook for the week – 04 to 08.04.2016

Range bound; Tata Steel to be in focus

 ( www.rupeedesk.in )

Stocks of major metal and mining companies are seen trading in a range next week despite extension

of safeguard duty on hot-rolled flat products of non-alloy and other alloy steel in coils of width 600

mm or more till March 2018 by the government due to higher valuations. Further, Reserve Bank of

India is likely to cut repo rate by 25 basis points in its first monetary policy for 2016-17(Apr-Mar) on

Tuesday which is seen as a positive for the debt-laden sector. However, due to higher valuations most metal companies saw a correction in the last week and the trend is expected to continue next week

.

The revival is still not seen in the sector and in last week we have seen some correction in the stock

prices for steel companies, it might continue. Focus would be on Tata Steel which announced on

Wednesday its decision to explore the sale of Tata Steel UK, in whole or in parts, and restructure its

European business, as a bleak outlook for the global steel market made the business unviable. UK

government said it will provide with whatever support it can to protect steelmaking in the country as it directly impacts jobs of an estimated 40,000 workers as per reports. However, the demand for steel is muted and has not seen much improvement in both domestic and international markets.