Hindalco, Tata Steel and more, CLSA says rally in shares to continue in near term
CLSA expects domestic steel prices to remain resilient in the near term as the domestic demand uptick adds to the above themes. However, CLSA expects prices to cool off and spreads to moderate over the course of 2021. The demand outlook in China following Chinese New Year will be a key item to monitor. CLSA forecasts FY22 spreads to be higher YoY but to be lower than spot. In a rising commodity price environment CLSA prefers Tata Steel (BUY) on its better margin outlook.
CLSA expects FY22 average prices to be up 4% YoY, but to decline from spot. Lower domestic production (mainly in Odisha) and higher exports, along with higher global prices have supported iron ore prices in India: Reuters