Even in a weak market, Nifty metal is up by over 2 percent. In fact in the previous month ending November, Nifty metal posted gains of 25 percent. In comparison Nifty 50 rose 11 percent.
In trade on December, stocks contributing to the most gains are JSW Steel, Hindustan Zinc, Tata Steel, Vedanta, SAIL.
So, the surge is primarily on the back of gain in steel prices. "Steel prices in India have rallied by Rs 4,000-5,000 per tonne (10-13 percent) MoM in November 2020. Despite these hikes, domestic HRC prices are trading at par to the landed cost of imports from Korea, raising the possibility of further hikes in December 2020," Motilal Oswal said in a recent report.
Also regional prices are higher which are supporting higher prices. Barring the steel prices, there is being seen a mixed trend in other raw material prices. So, while iron ore prices are at a multi-year high, coking coal prices are at a 4-year low.
And further as there is seen strengthening in domestic demand and higher regional steel prices, steel spread is at 3-year high.