3 Metal and Mining Stock ICICI Securities Has A "Buy" Call On

ICICI Securities has come-up with its latest report on the metals and mining sector. The firms believes that in China, the 'darkest moment' of real estate financing has likely passed, and the market is showing signs of improvement.

"Besides, higher and sufficient headroom for price increase in the India market, keeps us positive on the sector. We Maintain BUY on JSPL (target price: Rs750) and Shyam Metalics (target price: Rs 570), with ADD on Tata Steel (Target price: Rs 120) and BUY on APL Apollo (target price: Rs 1,375)," the brokerage has said.

According to ICICI Securities, domestic HRC prices in the traders' market rose by Rs500/te WoW to Rs60,000/te mainly due to price hike of Rs1,000-1,500/te taken by major steel players across the flat products segment.

"On the cost front, coking coal prices have corrected by a further US$18/te to US$265/te (lowest thus far in CY23). As a result, spot spread has risen to Rs30,080/te - highest since Nov'22. While export prices have fallen by US$7/te WoW tracking Chinese export prices and lower prices in Vietnam, we believe Europe presents a good opportunity in the next two months," the brokerage has said.
Though credit data is supportive of steel consumption growth in China, demand has thus far stayed subdued. "We expect the liquidity injection drive of the government to translate into demand uptick in the AprJun'23 period when construction picks up. According to statistics from the Cailianshe, in the Q1CY23, 149 domestic bonds were issued in the real estate industry, with a scale of over CN¥150bn; net financing returned to positive territory, reaching CN¥6.58bn. The total HRC inventory dropped 1.4% WoW, with traders' inventory falling 3.2% WoW and in-plant inventory at steel mills rising 3.7% WoW. Going ahead, we expect inventory to decline as demand picks up," ICICI Securities has said.