Indian Metal and Mining Sector Shines Amid Global Commodity Struggles

Indian metal and mining firms are thriving with strong steel production growth and rising commodity demand, even as global markets face stagnation. A Jefferies report highlights robust earnings projections and increasing demand in India, while anticipating gradual recovery in the US and China by 2025 to boost commodity prices.

Indian metal and mining companies are emerging as a beacon of growth in the struggling global commodity market, according to a report by Jefferies. The firm's analysis indicates a notable 22% growth in India's steel production between 2019 and 2023, starkly contrasting with the global 1% decline over the same timeframe.

The Jefferies report emphasizes robust earnings potential for Indian steel firms from FY25-27, driven by increased volumes and favorable conversion spreads. Rising aluminium and alumina prices, coupled with effective cost management in Indian operations, are also highlighted as key contributors to future growth prospects.

Meanwhile, global commodity demand is expected to recover gradually by 2025, particularly in the US and China, providing further support to prices. Indian steel demand already shows significant growth, spurred by governmental infrastructure initiatives and rising power requirements, forecasting a healthy CAGR for coal demand in the coming years, despite potential global uncertainties.

(With inputs from agencies.)