Metal producers may lose sheen at ferrous counter

ET Intelligence Group: Metal producers are expected to deliver a mixed performance in the September quarter. Ferrous companies are likely to report weaker margins amid falling steel prices and higher raw material costs. On the other hand, non-ferrous producers are expected to post stronger earnings on the back of a rebound in prices of aluminium, zinc and copper.

Domestic hot-rolled coil (HRC) prices declined by ₹2,200 per tonne quarter-on-quarter to ₹49,500 per tonne in the second quarter of the current fiscal year, primarily driven by seasonal weakness, according to Motilal Oswal Financial Services. Average primary rebar prices fell by ₹7,300 per tonne sequentially to ₹48,000 per tonne due to muted construction demand amid the heavy monsoon season. "We expect realisations of ferrous companies to dip sequentially by ₹2,500-3,000 per tonne for the September quarter," said the broker in a report

During Q2FY26, domestic steel prices decreased by ₹2,223 per tonne due to slowdown in the consuming sectors amid seasonality which will impact margins. Kotak Institutional Equities estimates margins for steel companies to sequentially decrease by ₹2,800 per tonne on average in the second quarter.