Metals rally on weak dollar, China vows to heal property woes

In regards to steel production, India has demonstrated growth, with production crude steel in June recording a 12.9 percent increase compared to the same period last year. Moreover, the first half of the year (January to June) witnessed a 7.4 percent surge in steel production year-on-year (YoY).

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BHP, a major player in the steel industry, is optimistic about India's steel production trajectory. According to their estimates, India produced 100 million tonnes of steel in 2020, which rose to 125 million tonne in 2022. The current estimate for 2023 stands at 134 million tonne, and BHP envisions even greater growth with estimates reaching 450-500 million tonne by 2050.

The expansion in steel production has upped India's position as a high-margin, global steel producer. With steel mill margins ranging from $80 to $100 a tonne, Indian steel mills outperformed their Chinese counterparts where margins averaged $20 a tonne.

The surge in steel prices has further contributed to the overall growth in the metal industry. Steel prices rose by 2 percent over the week and 1.5 percent over the month, signalling a positive outlook for the sector.

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Notably, metals have become pricier since the Chinese government announced on July 3 that exports of the two metals along with their chemical compounds would be curbed starting August 1. The restrictions come at a time when countries, including India, are aggressively trying to build semiconductor manufacturing capacity to reduce their dependence on the import of equipment.

The restrictions are significant because China produces around 60 percent of the global germanium output, and around 80 percent of gallium, according to the European industry association Critical Raw Materials Alliance (CRMA).