ET NEWS

ET Intelligence Group: The BSE Metal Index has jumped 13% in the past three months, outperforming nearly 2% drop in the Sensex amid a broad rally across ferrous and non-ferrous stocks. Shares of metal companies have surged up to 33% over the past three months amid rising prices of both ferrous and non-ferrous metals due to a combination of factors such as demand recovery, policy support, and supply constraints. Domestic steel prices have rebounded sharply from their December lows after the government reinstated the safeguard duty- which had expired in November- for three years starting from the end of December. This lifted the sentiments for domestic steel manufacturers as imports declined and prices firmed up. Domestic steel prices have rebounded since December, with average Q4 hot-rolled coil (HRC) prices rising by about ₹5,300 per tonne or 2% quarter-on-quarter and primary rebar prices increasing by roughly ₹8,200 per tonne or 3%. Steel firms have also announced ₹1,000-2,000 per tonne price increase in early January.128532574 In addition, steel exports strengthened as European Union buyers engaged in pre-emptive restocking ahead of the Carbon Border Adjustment Mechanism (CBAM), which came into effect on January 1, 2026. Under CBAM's transition phase, EU importers are required to start reporting emissions of imported steel, and once the full regime begins, they will have to pay for the embedded carbon. To avoid these future costs and uncertainties, many EU buyers front-loaded their purchases from India. In non-ferrous metals, supply disruptions in key mining regions such as Chile, Peru and Indonesia have pushed up copper and nickel prices. Several global aluminium smelters faced outages, keeping supply tight. Demand remains strong, especially as China has capped its aluminium capacity at 45 million tonnes. Analysts expect steelmakers to report stronger earnings for the March quarter in the light of higher prices, strong volumes and improved operating performance, while non-ferrous producers are likely to benefit from firm global prices and robust demand. "For Q4, realisations for steel companies are expected to improve by ₹2,500-4,500 per tonne. This will be partially offset by higher coking coal costs, which could increase by ₹1,300-1,600 per tonne of steel," Parthiv Jhonsa, lead analyst (metals & mining), Anand Rathi Institutional Equities, told ET. He added that for non-ferrous companies, elevated global prices and rupee depreciation will support earnings in the March-quarter since their revenues are dollar denominated. The current quarter is also typically the strongest volume quarter for metals, and most steel companies have maintained their volume guidance. "Aluminium fundamentals remain stronger, supported by the limited scope for incremental production in China and firm copper prices," said Elara Capital in a report.

Mumbai: India's steel sector is poised for a fresh burst of primary market activity, with at least 10 steel producers and steel-related companies preparing to raise ₹5,000-7,000 crore in total through initial public offerings over the next eight to 10 months. Steel Infra Solutions Company Ltd, German Green Steel & Power Ltd, Rajputana Stainless Ltd, Bombay Coated Steel Ltd, A-One Steels India Ltd, Jindal Supreme (India) Ltd, Madhur Iron & Steel Ltd, and Synergy Advanced Metals Ltd are among those who have filed draft red herring prospectuses (DRHPs), while a few others are in advanced stages of preparation, according to investment bankers. The steel industry's rush to tap the capital markets comes amid improving demand visibility and supportive policy measures. "India's steel demand is expected to grow due to infrastructure push for roads, railways, ports, recovery in the steel sector, the PLI scheme for manufacturing, and the government's continued focus on capex," said Uday Patil, executive director at PL Capital Markets. 128532190 He added that about 25-30% of steel demand is linked to government projects and that safeguard and anti-dumping duties on select imports have helped domestic producers compete on a more level-playing field. Local companies are targeting significant capacity expansions under the government's long-term steel policy, aiming to capture the next leg of growth. Mid-sized processors and specialty steel makers, particularly those in coated steel, stainless products, and specialty alloys, are seeing improved order visibility from infrastructure, renewables, railways, metro projects, auto and engineering sectors. "There is a clear capacity build-out cycle underway among mid-tier players who want to capture domestic demand growth and reduce import dependence in certain product categories," said Deep Shah, senior manager at Unistone Capital, an investment banking firm. IPO proceeds are expected to be deployed towards greenfield lines, galvanising units, colour-coating facilities and stainless capacity additions. Besides expansion, companies are also looking to strengthen financial profiles, Shah said. After a prolonged deleveraging phase over the past decade, many steel companies are using favourable equity market conditions to further clean up their balance sheets. Lower leverage can improve return ratios, reduce interest burden, enhance credit ratings, and support future borrowing at better terms.Given the working capital-intensive nature of the steel trade, a portion of the IPO proceeds is also likely to be earmarked for liquidity support to meet capacity expansions. Bankers also flagged sectorspecific risks such as volatility in steel prices, swings in coking coal costs, import competition, global demand slowdown, and currency movements affecting exports. Margin sustainability will be closely monitored, particularly if raw material costs remain elevated. Yet market participants argue that the narrative around steel is gradually evolving. “India’s steel industry is not viewed purely as a commodity story but as a structural growth play backed by consumption from infrastructure, renewables, railways and urban development.” said Amogh Giridhar, associate partner at Prequate Advisory, adding that investors are becoming comfortable underwriting cyclical businesses where there is evidence of prudent leverage and disciplined capex plans. However, bankers believe the real test in public markets would always be balance sheet quality and capital allocation discipline for a historically — volatile industry. “Those with clear integration strategies and export competitiveness, coupled with strong domestic consumption may be able to command premium valuations despite the cyclical backdrop,” said Giridhar.

Federal Reserve officials were in near-unanimous agreement to keep interest ​rates on hold at their meeting last month, but remained split over what might happen next, with "several" policymakers raising the risk of possible hikes in borrowing costs if inflation remains elevated, and others split over if and when further cuts might be warranted, according to minutes of their January 27-28 ‌meeting.The decision to ⁠hold rates ⁠steady was shared by "almost all" U.S. central bank officials as a way to assess where the economy stood after 75 basis points of cuts last ​year, with only a "couple" supporting a rate cut, said the minutes, which were released on Wednesday.Fed Governors Christopher Waller and Stephen Miran ​both cast dissenting votes at the meeting based on concerns the job market may be at risk of weakening.But opinion fractured among the other 17 officials, with the first direct mention of possible rate hikes if inflation remains above the Fed's 2% target. ​It is currently running about a percentage point above that level.Though an expected ⁠easing of ‌inflation this year is widely anticipated and expected to clear the way for further rate cuts, the ​minutes said that "several ​participants indicated they could have supported a two-sided description of the (Federal Open Market) Committee's future interest ⁠rate decisions, reflecting the possibility that upward adjustments to the target range for the ​federal funds rate could be appropriate if inflation remains at above-target levels.""Some" others felt ​rates would need to be on hold "for some time" while they awaited new inflation and economic data, with a subset of that group arguing that cuts may not be appropriate at all until there is evidence that "disinflation is back on track.""Several," by contrast, said their baseline outlook for inflation and the economy did include further rate reductions.The minutes put the debate at the January meeting in a hawkish light as officials voted to hold the policy rate steady in the current 3.50%-3.75% range ‌and signal it may remain there for some period of time. Investors expect the Fed to keep its current policy rate in place until the June 16-17 meeting, with quarter-percentage-point rate cuts anticipated at ​that session and the one ​in September.FED CHIEF SUCCESSIONThe June ⁠meeting could be the first under Fed chief nominee Kevin Warsh if he is confirmed by the U.S. Senate in time to take over when Fed Chair Jerome Powell's term as head of the central bank ends in May.The Fed's next ​meeting is scheduled for March 17-18, when policymakers will provide updated economic and interest rate projections.Data releases since the January meeting have done little to resolve the debate over whether the Fed should prioritize putting further downward pressure on inflation by leaving borrowing costs where they are or supporting job and economic growth with cheaper credit.Consumer price inflation for January was weaker than expected, yet job growth for the month beat expectations and the unemployment rate fell, with most officials saying they expect reasonably strong economic growth to continue. (Reporting by Howard Schneider; Editing by Andrea Ricci and Paul Simao)