India Metals, Mining Q3 Results Preview - Mining Companies To Outperform Primary Steel Producers: Systematix

Systematix Research Report

India’s steel production and demand remained strong during the quarter, persistently resilient compared to the rest of the world, a scenario we have seen throughout the current calendar year.

Over the January-November 2023 period, India’s crude steel production increased 8.6% YoY compared to 1.4% growth in global crude steel production.

Developed economies like the USA and Japan have recorded a decline in steel production during the same period (USA -0.4% and Japan -2.4%). India emerged as the second largest steel producer in the world during April-November FY24 with domestic finished steel production reaching 89.7 million tonne, an increase of 14.3% compared to the corresponding period last year.

The consumption surge underscores the pivotal role that steel plays in various sectors driving economic development and progress, as also indicated by various economic indicators.

However, the same period was marked by rising imports and subdued steel prices with China resorting to exports in the face of sluggish local demand and elevated production.

Prices of major base metals fell YoY during the quarter, with zinc/aluminium/lead recording a decline of 16.8%/5.8%/1.7%.

Sequentially, zinc and aluminium prices rose 2.9% and 1.8%, respectively.

Copper London Metal Exchange price was up 2% YoY and down 2% QoQ to $8,169/tonne. Silver prices slid lower by 1.4% QoQ but were higher by 7.8% on a YoY basis.

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