Metals Sector Check - Non-Ferrous Counter Looks More Attractive: ICICI Securities
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ICICI Securities Report
With Chinese demand (across commodities) remaining weak as the traditional peak season approaches, there are obvious risks to steel prices – which globally are still at all-time highs and have not seen any meaningful correction (despite sharp drop in iron ore prices).
Globally, steel stocks have seen meaningful compression in multiples as consensus globally expects a sharp correction in steel prices soon.
Timing is a concern, and each day the correction gets postponed, deleveraging adds to fair value.
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