India's Metal and Mining Firms Gain Spotlight in Stagnant Global Market

Indian metal and mining firms are becoming a significant highlight in a global market facing stagnant commodity volumes, according to a report by Jefferies. The report emphasized India's strong steel production increase of 22 percent from 2019 to 2023, notably different from the 1 percent decrease seen worldwide in the same timeframe.

It said "Indian metal & mining firms offer a bright spot in the world largely devoid of volume growth in commodities".

The report projects robust profit growth for Indian steel firms between FY25-27, fueled by increasing volumes and enhanced conversion spreads. Aluminium and alumina prices are increasing, alongside efficient cost management in Indian operations.

The report maintained a positive outlook for India's metal industry, anticipating an increase in demand for steel and aluminium as the supply-demand equilibrium becomes more favorable. Worldwide, Jefferies' metals team predicted that the slow rebound in commodity demand in the US and China by 2025 might offer additional backing to prices.

In the US, positive elements like diminished corporate tax rates, lighter regulatory requirements, lower interest rates, and stable inflation are anticipated to stimulate higher fixed asset investment (FAI) in manufacturing and metal-heavy projects.

In China, the demand is expected to gain from the implementation of supportive policies, as extra fiscal and monetary assistance could elevate the market even more.