Metal stocks glitter on Dalal Street, eye stronger March quarter

The BSE Metal Index has seen a remarkable 13% increase over the past three months, significantly outpacing the nearly 2% decline in the Sensex, driven by a robust rally in both ferrous and non-ferrous metal stocks. This surge is attributed to recovering demand, supportive government policies, and supply constraints that have heightened metal prices. Domestic steel prices have rebounded sharply following the government's reinstatement of the safeguard duty, which had lapsed in November, leading to decreased imports and increased domestic prices. With hot-rolled coil (HRC) prices rising by approximately ₹5,300 per tonne and primary rebar prices increasing by around ₹8,200 per tonne, steel manufacturers are optimistic about their earnings for the March quarter. In addition to domestic developments, the European Union's preemptive restocking ahead of the Carbon Border Adjustment Mechanism (CBAM) has spurred steel exports from India. Non-ferrous metals are also benefiting from global supply disruptions, particularly in copper and nickel, while strong demand continues as China limits aluminium production. Analysts predict robust earnings for steelmakers and non-ferrous producers in the upcoming quarter, buoyed by higher prices and improved operational performance. However, rising coking coal costs may temper some gains for steel companies.