Since today’s trading session began, the big metal stocks have been trading in the green, owing to the upcoming metal stocks’ Q3 performances, which will be announced in the coming days. JSW Steel is announcing its October-December quarter results today, which is a big reason for the metals stocks to surge today. While the BSE Metal Index surged by 0.37% as the market opened, the Nifty Metals is trading around 0.34% above yesterday’s closing bell.
Having said that, is the entire metal sector witnessing a positive sentiment or is it a part of it? Let’s find out in today’s article.
Metal Sector Decoded
The third quarter of the financial year has always been positive for the metal sector. Traditionally speaking, the post-monsoon pickup in construction works has always worked for the sector. In FY25, the companies operating in the ferrous metal segment saw higher demand due to a surge in construction activities but cheap Chinese imports and a drop in global steel prices took a toll on the overall profitability.
Ferrous segment
The strong demand for long steel products which are mainly used in the construction of buildings and other infrastructures can also help ferrous companies recover their volumes by 1%. Thus, companies which have long steep as their primary products can see profitability going up by 1.5% to 2% amidst average realisations dropping by 6%.
The companies which have flat steel as their main products which include hot rolled coils can witness the EBITDA decline by ₹1000 to ₹2000 per tonne since global steel prices are struggling, and Chinese import prices have become cheaper.
Even amidst the challenges, around $15-$20 per tonne drop in coking coal prices led to easing production costs of ferrous companies which helped their profitability to remain stable. Having said that, the rise in the cost of iron ores by ₹300 to ₹350 per tonne offset the above benefit to quite some extent.
Non – Ferrous segment
Coming to the non-ferrous segment of the metal sector, the companies operating in this sector have been outperforming due to higher global prices of metals and higher demand. The companies which are mainly focused on aluminium and zinc are expected to have performed well in the third quarter. Apart from higher global prices and demand, the weaker rupee has also added to the profitability of these non-ferrous metal companies. For non-integrated players, the stable production cost played a pivotal role.
Upcoming Q3 Results – Metal sector
| HINDALCO | Feb 13, 2025 |
| JINDAL STEEL & POWER | Jan 30, 2025 |
| HINDUSTAN ZINC | Jan 28, 2025 |
| JSW STEEL | Jan 24, 2025 |
- APL Apollo Tubes: This metal company announced its results on 20 January. The net sales went up from ₹4047.79 crore in Q3FY24 to ₹5432.73 crore in Q3FY25. The net profit for the quarter stood at ₹216.97 crore compared to ₹165.51 crore a year back. The EPS rose from 5.97 per share to 7.82 indicating a significant growth.
Recent Stock Metal Performances
With the buzz of upcoming q3 results, JSW Steel is trading around 1.25% higher today compared to the previous close. The result of the company is due today. Apart from this, Tata Steel has surged around 1.11%, Jindal Steel following with a 0.62% rise, VEDL with a 0.54% rise. SAIL on the other hand has risen by 0.34% only today. It will be interesting to see how the metal sector q3 Growth influences the market further.
Source: Cnbctv18
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