{"id":21154,"date":"2022-09-27T12:38:40","date_gmt":"2022-09-27T07:08:40","guid":{"rendered":"https:\/\/flattrade.in\/kosh\/?p=21154"},"modified":"2022-09-27T12:57:16","modified_gmt":"2022-09-27T07:27:16","slug":"falling-metal-prices-and-high-energy-costs-to-weigh-on-margins-in-fy23-says-icra","status":"publish","type":"post","link":"https:\/\/flattrade.in\/kosh\/falling-metal-prices-and-high-energy-costs-to-weigh-on-margins-in-fy23-says-icra\/","title":{"rendered":"Falling metal prices and high energy costs to weigh on margins in FY23, says ICRA"},"content":{"rendered":"\t\t<div data-elementor-type=\"wp-post\" data-elementor-id=\"21154\" class=\"elementor elementor-21154\">\n\t\t\t\t\t\t<section class=\"elementor-section elementor-top-section elementor-element elementor-element-1ce7e16b elementor-section-boxed elementor-section-height-default elementor-section-height-default\" data-id=\"1ce7e16b\" data-element_type=\"section\" data-e-type=\"section\">\n\t\t\t\t\t\t<div class=\"elementor-container elementor-column-gap-default\">\n\t\t\t\t\t<div class=\"elementor-column elementor-col-100 elementor-top-column elementor-element elementor-element-56023c51\" data-id=\"56023c51\" data-element_type=\"column\" data-e-type=\"column\">\n\t\t\t<div class=\"elementor-widget-wrap elementor-element-populated\">\n\t\t\t\t\t\t<div class=\"elementor-element elementor-element-62c99648 elementor-widget elementor-widget-text-editor\" data-id=\"62c99648\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t<p>The primary non-ferrous metal industry is expected to see significant headwind in H1FY23 due to challenging operating environment following sharp metal price corrections and higher coal costs in the current fiscal, according to rating agency ICRA. However, the rating agency expects some respite in H2FY23 for the domestic non-ferrous metal companies.<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t<section class=\"elementor-section elementor-top-section elementor-element elementor-element-13c31f11 elementor-section-boxed elementor-section-height-default elementor-section-height-default\" data-id=\"13c31f11\" data-element_type=\"section\" data-e-type=\"section\">\n\t\t\t\t\t\t<div class=\"elementor-container elementor-column-gap-default\">\n\t\t\t\t\t<div class=\"elementor-column elementor-col-100 elementor-top-column elementor-element elementor-element-2ce30fb4\" data-id=\"2ce30fb4\" data-element_type=\"column\" data-e-type=\"column\">\n\t\t\t<div class=\"elementor-widget-wrap elementor-element-populated\">\n\t\t\t\t\t\t<div class=\"elementor-element elementor-element-4aaf8f44 elementor-widget elementor-widget-heading\" data-id=\"4aaf8f44\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"heading.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t<h2 class=\"elementor-heading-title elementor-size-default\"><br>Price Correction <\/h2>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t<section class=\"elementor-section elementor-top-section elementor-element elementor-element-2f0a4f41 elementor-section-boxed elementor-section-height-default elementor-section-height-default\" data-id=\"2f0a4f41\" data-element_type=\"section\" data-e-type=\"section\">\n\t\t\t\t\t\t<div class=\"elementor-container elementor-column-gap-default\">\n\t\t\t\t\t<div class=\"elementor-column elementor-col-100 elementor-top-column elementor-element elementor-element-1cb775a2\" data-id=\"1cb775a2\" data-element_type=\"column\" data-e-type=\"column\">\n\t\t\t<div class=\"elementor-widget-wrap elementor-element-populated\">\n\t\t\t\t\t\t<div class=\"elementor-element elementor-element-1725ab44 elementor-widget elementor-widget-text-editor\" data-id=\"1725ab44\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t<p>Prices of base metals have fallen by 25-40% till date in FY23 in the international market, compared to the record high prices in March 2022 due to various macro-economic concerns, ICRA said in the report.<\/p><p>Lower Chinese demand and tightening of monetary policy by major global central banks is likely to impact global non-ferrous metal demand in 2022 and weigh on the metal prices. The Gross Domestic Product (GDP) and Purchasing Managers Index (PMI) data of major global economies in the most recent quarter also reflect concerns over global economic growth.<\/p><p>\u201cThe metals balance is likely to remain in deficit owing to production cut for aluminium and zinc in Europe, amid higher energy prices in the region,\u201d said Jayanta Roy, Senior Vice-President and Group Head, Corporate Sector Ratings, ICRA.\u00a0<\/p><p>He added that the copper supply was also hit in Q2 of CY2022 owing to prolonged protests in large mines of Peru. Roy expects metal prices to remain range bound in coming quarters.<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t<section class=\"elementor-section elementor-top-section elementor-element elementor-element-667a52b7 elementor-section-boxed elementor-section-height-default elementor-section-height-default\" data-id=\"667a52b7\" data-element_type=\"section\" data-e-type=\"section\">\n\t\t\t\t\t\t<div class=\"elementor-container elementor-column-gap-default\">\n\t\t\t\t\t<div class=\"elementor-column elementor-col-100 elementor-top-column elementor-element elementor-element-39f9d35a\" data-id=\"39f9d35a\" data-element_type=\"column\" data-e-type=\"column\">\n\t\t\t<div class=\"elementor-widget-wrap elementor-element-populated\">\n\t\t\t\t\t\t<div class=\"elementor-element elementor-element-a2a56fd elementor-widget elementor-widget-heading\" data-id=\"a2a56fd\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"heading.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t<h2 class=\"elementor-heading-title elementor-size-default\"><br>High Power Cost<\/h2>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t<section class=\"elementor-section elementor-top-section elementor-element elementor-element-2d3fdd82 elementor-section-boxed elementor-section-height-default elementor-section-height-default\" data-id=\"2d3fdd82\" data-element_type=\"section\" data-e-type=\"section\">\n\t\t\t\t\t\t<div class=\"elementor-container elementor-column-gap-default\">\n\t\t\t\t\t<div class=\"elementor-column elementor-col-100 elementor-top-column elementor-element elementor-element-57d58ec2\" data-id=\"57d58ec2\" data-element_type=\"column\" data-e-type=\"column\">\n\t\t\t<div class=\"elementor-widget-wrap elementor-element-populated\">\n\t\t\t\t\t\t<div class=\"elementor-element elementor-element-863217a elementor-widget elementor-widget-text-editor\" data-id=\"863217a\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t<p>Power cost for domestic base metal companies have significantly increased owing to the lower availability of coal linkages to non-power sectors and elevated coal prices in both domestic e-auction and the international markets. ICRA noted that the domestic e-auction premia on coal remained high at around 300%. Consequently, the profitability of domestic non-ferrous entities would be impacted, primarily for power intensive metals viz. aluminium and zinc due to higher coal prices.<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t<section class=\"elementor-section elementor-top-section elementor-element elementor-element-3545f816 elementor-section-boxed elementor-section-height-default elementor-section-height-default\" data-id=\"3545f816\" data-element_type=\"section\" data-e-type=\"section\">\n\t\t\t\t\t\t<div class=\"elementor-container elementor-column-gap-default\">\n\t\t\t\t\t<div class=\"elementor-column elementor-col-100 elementor-top-column elementor-element elementor-element-6bb2eac0\" data-id=\"6bb2eac0\" data-element_type=\"column\" data-e-type=\"column\">\n\t\t\t<div class=\"elementor-widget-wrap elementor-element-populated\">\n\t\t\t\t\t\t<div class=\"elementor-element elementor-element-1f090b90 elementor-widget elementor-widget-heading\" data-id=\"1f090b90\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"heading.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t<h2 class=\"elementor-heading-title elementor-size-default\"><br>Financial Outlook<\/h2>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t<section class=\"elementor-section elementor-top-section elementor-element elementor-element-2b2b0833 elementor-section-boxed elementor-section-height-default elementor-section-height-default\" data-id=\"2b2b0833\" data-element_type=\"section\" data-e-type=\"section\">\n\t\t\t\t\t\t<div class=\"elementor-container elementor-column-gap-default\">\n\t\t\t\t\t<div class=\"elementor-column elementor-col-100 elementor-top-column elementor-element elementor-element-520e29cb\" data-id=\"520e29cb\" data-element_type=\"column\" data-e-type=\"column\">\n\t\t\t<div class=\"elementor-widget-wrap elementor-element-populated\">\n\t\t\t\t\t\t<div class=\"elementor-element elementor-element-4569ca0d elementor-widget elementor-widget-text-editor\" data-id=\"4569ca0d\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t<p>Non-ferrous metal industry is expected to see healthy domestic demand at 5-6% in the current fiscal year as the Indian Government pushes for infrastructure development and also aided by an uptick in real estate industry.<\/p>\n<p>Moreover, domestic companies\u2019 total indebtedness has declined to Rs 610 billion in FY2022, from Rs 640 billion in FY2021 and Rs 700 billion in FY2020.<\/p>\n<p>The rating agency noted that the credit metrics of primary base metal producers would continue to be comfortable despite a likely moderation in profitability. Further, the industry debt to OPBDITA (Operating Profit Before Depreciation, Interest, Tax and Amortization) is likely to increase to 1.7 times in FY23 from 1.1 times in FY22, it will be still less than the pre-Covid levels of 3.6 times in FY20.<\/p>\n<p>&#8220;Owing to the twin onslaught of corrections in metal prices and continued high coal prices, the estimated operating profitability of domestic players is likely to contract by 600-700 bps in FY2023 after a weak performance in Q1 FY2023,\u201d Roy reiterated.<\/p>\n<p>The elevated cost of coal remains a concern in the near-term and ICRA had revised the outlook of the base metal industry to Stable from Positive in July 2022 owing to the expected decline in profitability.<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t<section class=\"elementor-section elementor-top-section elementor-element elementor-element-65b7fd1c elementor-section-boxed elementor-section-height-default elementor-section-height-default\" data-id=\"65b7fd1c\" data-element_type=\"section\" data-e-type=\"section\">\n\t\t\t\t\t\t<div class=\"elementor-container elementor-column-gap-default\">\n\t\t\t\t\t<div class=\"elementor-column elementor-col-100 elementor-top-column elementor-element elementor-element-148dd93e\" data-id=\"148dd93e\" data-element_type=\"column\" data-e-type=\"column\">\n\t\t\t<div class=\"elementor-widget-wrap elementor-element-populated\">\n\t\t\t\t\t\t<div class=\"elementor-element elementor-element-65d3a17a elementor-widget elementor-widget-heading\" data-id=\"65d3a17a\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"heading.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t<h2 class=\"elementor-heading-title elementor-size-default\"><br>Stocks To Watch<\/h2>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t<section class=\"elementor-section elementor-top-section elementor-element elementor-element-4c18077b elementor-section-boxed elementor-section-height-default elementor-section-height-default\" data-id=\"4c18077b\" data-element_type=\"section\" data-e-type=\"section\">\n\t\t\t\t\t\t<div class=\"elementor-container elementor-column-gap-default\">\n\t\t\t\t\t<div class=\"elementor-column elementor-col-100 elementor-top-column elementor-element elementor-element-725e9b10\" data-id=\"725e9b10\" data-element_type=\"column\" data-e-type=\"column\">\n\t\t\t<div class=\"elementor-widget-wrap elementor-element-populated\">\n\t\t\t\t\t\t<div class=\"elementor-element elementor-element-37022fcb elementor-widget elementor-widget-text-editor\" data-id=\"37022fcb\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t<p>Some of the companies present in the non-ferrous metal industry are as follows:\u00a0Vedanta, Hindustan Zinc, Hindalco, NALCO,\u00a0 Hind Copper, Tinplate, Maithan Alloys, Gravita India, Precision Wires, Ram Ratna Wires and Arfin India.\u00a0<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t<section class=\"elementor-section elementor-top-section elementor-element elementor-element-51dfc5f1 elementor-section-boxed elementor-section-height-default elementor-section-height-default\" data-id=\"51dfc5f1\" data-element_type=\"section\" data-e-type=\"section\">\n\t\t\t\t\t\t<div class=\"elementor-container elementor-column-gap-default\">\n\t\t\t\t\t<div class=\"elementor-column elementor-col-100 elementor-top-column elementor-element elementor-element-322d40e3\" data-id=\"322d40e3\" data-element_type=\"column\" data-e-type=\"column\">\n\t\t\t<div class=\"elementor-widget-wrap elementor-element-populated\">\n\t\t\t\t\t\t<div class=\"elementor-element elementor-element-14719a70 elementor-align-center elementor-widget elementor-widget-button\" data-id=\"14719a70\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"button.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t<div class=\"elementor-button-wrapper\">\n\t\t\t\t\t<a class=\"elementor-button elementor-button-link elementor-size-sm\" href=\"https:\/\/ekyc.flattrade.in\/openaccount\/?utm_source=Blog&#038;utm_medium=organic&#038;utm_campaign=Demat+Account\">\n\t\t\t\t\t\t<span class=\"elementor-button-content-wrapper\">\n\t\t\t\t\t\t\t\t\t<span class=\"elementor-button-text\">Open a Free Demat Account<\/span>\n\t\t\t\t\t<\/span>\n\t\t\t\t\t<\/a>\n\t\t\t\t<\/div>\n\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t<\/div>\n\t\t","protected":false},"excerpt":{"rendered":"The primary non-ferrous metal industry is expected to see significant headwind in H1FY23 due to challenging operating environment&hellip;","protected":false},"author":5,"featured_media":21161,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"csco_display_header_overlay":false,"csco_singular_sidebar":"","csco_page_header_type":"","csco_page_load_nextpost":"","csco_post_video_location":[],"csco_post_video_location_hash":"","csco_post_video_url":"","csco_post_video_bg_start_time":0,"csco_post_video_bg_end_time":0,"csco_post_video_bg_volume":false,"footnotes":""},"categories":[65],"tags":[46,43,78,48,26,77,47,24,23],"class_list":{"0":"post-21154","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-industry","8":"tag-market-news","9":"tag-market-update","10":"tag-nifty","11":"tag-nifty-today","12":"tag-nse","13":"tag-sensex","14":"tag-sensex-today","15":"tag-share-market","16":"tag-stock-market","17":"cs-entry","18":"cs-video-wrap"},"yoast_head":"<!-- This site is optimized with the Yoast SEO 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