Summary:

Steel companies are likely to see increased demand and improved margins in Q3 FY25, driven by a favorable demand outlook, rising long steel prices, and steady flat steel pricing. Coking coal prices are expected to drop by US$ 25/tonne (Rs. 2,110/tonne), further supporting margins. However, steel producers' net debt rose by 6-20% in Q2 FY25 due to ongoing capital expenditure (capex) increases.

Despite falling base metal prices in Q4 2022-23, the non-ferrous sector's earnings were boosted by a stronger product mix and lower costs. The average LME aluminium price declined 5.5% QoQ to US$ 2,382/tonne (Rs. 2,01,040.80/tonne), while zinc prices fell 2% QoQ to US$ 2,779/tonne (Rs. 2,34,547.60/tonne). Aluminium and zinc prices are expected to rise in Q3 FY25, boosting profitability for non-ferrous companies. Steel companies' EBITDA fell by 3% in Q2 FY25 due to lower steel realizations.

Source: IBEF 

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