Fortnightly metal and mining sector update: Emkay
Emkay Global Financial Services expects steel prices not to see major volatility in near term. "As expected steel prices slipped further during the last fortnight as Chinese de-stocking continue to put pressure along with demand worries," says the research report.
Emkay Global Financial Services metal and mining sector update:
As expected steel prices slipped further during the last fortnight (ending 18th June) as Chinese de-stocking continue to put pressure along with demand worries. Iron ore prices however saw some bounce back on easing of import rules by China.
Ferrous: mixed bag
The CIS Black Sea (FoB) prices fell 1.4 percent to USD 510/ tonne. Chinese domestic prices meanwhile rose 1.5 percent to USD 561/tonne mainly towards the later half. Don’t expect sharp fall from here on, instead some stabilization is likely at these levels
Iron ore prices saw some improvement during the fortnight with 62 percent and 58 percent Fe prices rising 6.6 percent and 0.5 percent to USD 117.7/tonne and USD 104/tonne respectively. USD 100/ tonne is going to be a crucial level
We may not any drastic fall from here on in steel prices, while iron ore prices should stabilize around these levels.
All base metals meanwhile, on a fortnightly basis fell for the first time in a month despite 3.4 percent fall in Dollar index to 80.6 during the same period.
Non-ferrous: prices decline after some recovery
During the fortnight, base metal prices declined 3-5 percent. Copper, aluminium, zinc and lead declined 4 percent, 4 percent, 3 percent and 5 percent to close at USD 6971/tonne, USD 1795/tonne, USD 1817/tonne and USD 2076/tonne respectively
Inventory trend was also reversed. While copper and aluminium inventories increased 4 percent and 3 percent to 0.63 mt and 5.35 mt respectively, lead dropped significantly by 14 percent to 0.19 mt. and zinc inventory remained stable at 1.08 mt.
Believe, prices not to see major volatility in near term.
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