Metals & Mining News

Icra: Domestic demand for non-ferrous metals likely to grow at 9% over next two fiscals: Icra

[ad_1]

The domestic demand growth rate for non-ferrous metals is expected to remain healthy at 9 per cent in the next two financial years, according to Icra. The ratings agency also informed that the non-ferrous metal industry’s profit margins to remain under pressure amid weak global environment.

Aluminium, copper and zinc are some of the non ferrous metals.

“The domestic demand growth rate is expected to remain healthy at 9 per cent in the next two fiscals and would sharply outpace the expected rate of global demand growth. Thus, Icra has maintained stable outlook on the sector,” the agency said.

Jayanta Roy, Senior Vice-President and Group Head, Corporate Sector Ratings, Icra, said the global consumption of non-ferrous metals decelerated during the current calendar year due to sluggish demand conditions, primarily in the developed nations.

He further said that while there has been a partial recovery in demand from China compared to the lacklustre performance in the previous calendar year, uncertainty persists over the strength of China’s recovery. On the supply side, there are signs of increase, particularly in China, which is likely to result in a surplus metal balance for the ongoing calendar year.

Consequently, the metal prices are unlikely to improve much in the near term and industry’s profit margins to remain under pressure amid weak global environment, he added. “We maintain the estimates of operating profitability of domestic players at 17 per cent in FY2024 and FY2025, a contraction of almost 150 bps compared to FY2023 level,” Roy said.

[ad_2]

Source link