Ferrous industry players are anticipated to show robust performance in the fourth quarter, driven by significant increases in hot-rolled coil and rebar prices. Emkay Global Financial Services highlighted that COAL is likely to achieve substantial EBITDA growth, with a surge of over 46% or Rs 115 billion, supported by enhanced realizations and improved demand. Hot-rolled coil and rebar prices saw a notable rise of about 14% and 21% respectively on a sequential basis, attributed to strong demand, government infrastructure spending acceleration, and safeguard duties implementation.
The report also mentioned a neutral-to-positive outlook on both ferrous and non-ferrous players, with Steel Authority of India Limited (SAIL) expected to lead the gains in Q4, particularly due to a favorable product mix focused on long products. Non-ferrous players are projected to witness healthy growth driven by higher aluminium and silver prices, along with the depreciation of the Indian rupee, benefiting select private entities. However, mining and other sectors may display mixed performance according to the report.
Despite a rise in coking coal costs to an average of $232 per tonne in Q4 from $199 per tonne in Q3, putting slight pressure on EBITDA spreads for ferrous players, the overall impact is expected to be mitigated by increased realizations. The non-ferrous sector is forecasted to deliver strong sequential earnings growth, supported by higher aluminium and silver prices, a moderate uptick in zinc prices, and rupee depreciation.
Looking ahead, the report predicts that the ferrous sector’s earnings for fiscal 2027–28 will be bolstered by extended safeguard measures, an anticipated demand growth of around 8%, and production cuts in China. Mining and related segments are likely to exhibit varying performance trends, as per the report’s analysis.
