Metals Sector Update - Supply-Squeeze Driven Price ‘Fever’ Continues: ICICI Securities  
A coil of heated steel at a foundry. (Photographer Allison Farrand/Bloomberg)

Metals Sector Update - Supply-Squeeze Driven Price ‘Fever’ Continues: ICICI Securities  

BQ Blue’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer BloombergQuint’s subscribers an opportunity to expand their understanding of companies, sectors and the economy.

ICICI Securities Report

Regional hot rolled coil prices are consolidating at $1,000/tonne. The current fever in global prices is allowing approximately Rs 7,000-10,000/tonne increase in domestic prices for Q1 FY22, thereby, taking the cycle amplitude to unseen levels.

April, 2021-to-date has witnessed ~Rs 7,000/tonne increase in prices.

While we are factoring in a steady cyclical correction post Q1 FY21, the extent of price increase is leading to improved estimates of deleveraging, future return on equity profile and therefore, higher attributable price-to-book.

We are, therefore, changing the stance on the sector to neutral from negative.

Click on the attachment to read the full report:

ICICI Securities Metals Sector Update.pdf


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