India Metals, Mining - Background And Context: Dolat Capital
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Dolat Capital Report
Ever since we initiated our coverage on the Indian metals and mining sector, there has been a weak demand patch in China (mostly due to- cyclicality, government imposed restrictions on industrial activity to control emissions and credit control in the real estate sector which is again mostly regulatory driven), Covid-19 wave re-emergence in U.S. and Europe and some instances of Covid cases in China.
The ferrous sector has also had to struggle with the sharp spike in coking coal prices and steep fall in iron ore prices, while the cost push driven high aluminum/zinc prices cooled off a bit (10-15% from October peaks) as a result of coal price caps etc in China.
Separately, U.S. Fed has turned less dovish than earlier (while still maintaining the overall accommodative stance). If all this was not enough, another issue of a new Covid variant of concern (Omicron) has propped up, which has already spread to several countries.
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