Metals Weekly
11 June 2012
Metals Weekly
Valuations: Indian companies
Price
(INR)
Steel
Tata Steel
SAIL
JSW Steel
JSPL
NMDC
Sesa Goa
Non-ferrous
Sterlite Inds.
HZL
Nalco
Hindalco
Mid-caps
Monnet Ispat
Godawari
Sarda Energy
Tata Sponge
Adhunik Met.
Bhushan Steel
Rain Comm.
Prakash Inds.
411
95
641
440
168
188
101
118
60
120
340
114
127
286
34
452
37
46
EV/EBITDA
FY12 FY13E
6.9
9.2
6.9
8.2
5.1
2.3
3.2
5.0
9.8
6.3
10.3
4.1
8.6
1.9
9.8
9.8
3.2
3.4
5.9
7.1
6.3
8.1
4.0
2.8
2.9
4.3
9.2
6.4
9.0
4.7
6.3
1.0
6.5
9.4
2.8
2.4
P/BV
FY12
1.6
1.0
0.9
2.3
2.7
1.1
0.8
1.9
1.3
1.3
0.9
0.5
0.5
0.8
0.3
1.4
0.6
0.3
Metal Prices
CMP
Week
11-Jun
%
4-Jun
HRC Tube grade - Mumbai (INR/ton)40,118 0
40,118
HRC (USD/ton) fob CIS
593
0
593
HRC (USD/ton) fob China
654
0
656
Sponge iron - Raipur (INR/ton)
23,600
Pig iron - Raipur (INR/ton)
26,655
Iron ore spot (USD/ton) cfr China
137
Coke (USD/ton) fob
365
Shred. scrap (USD/ton) fob Rotter.
398
LME inventories (‘000 ton)
LME Spot (USD/ton)
Indian prices (INR ‘000/ton)
LME inventories (‘000 ton)
LME Spot (USD/ton)
Indian prices (INR ‘000/ton)
LME inventories (‘000 ton)
LME Spot (USD/ton)
Indian prices (INR ‘000/ton)
4,864
1,938
107
952
1,873
104
230
7,251
401
0
0
-1
0
-1
-1
0
-1
1
1
0
-1
-2
-2
-1
0
0
0
23,600
26,655
139
365
401
4,904
1,937
108
942
1,852
104
Quarter
% 2-Apr
2 39,438
-7
635
-6
693
-2 24,200
5 25,385
-9
150
-1
370
-3
410
-4
-8
0
6
-6
1
5,069
2,098
107
896
2,003
102
258
8,480
431
%
10
3
-2
YTD CY12
2-Jan
36,491
578
666
22,600
24,660
142
375
414
4,954
2,016
105
825
1,855
97
372
7,410
403
27,600
51,760
2,020
1.09
4
8
-4
-3
-4
-2
-4
3
15
1
7
-38
-2
-1
7
4
-7
8
231 -11
7,364 -14
409 -7
29,803
53,914
1,880
1.19
Note: Detailed table on pg 21
Source: MOSL
Valuations: Global companies
Price
Steel
A. Mittal EUR 11.3
Posco k KRW 370.5
US Steel USD 19.1
Nucor
USD 37.2
Gerdau
BRL 16.8
Bao Steel CNY 4.8
Non-ferrous
Alcoa
USD 8.5
Teck Res. USD 31.3
Xstrata
GBp 9.6
BHP
AUD 31.9
Rio Tinto AUD 55.6
Detailed on pg 21
EV/EBITDA
CY11 CY12
5.1
5.8
4.9
7.1
7.5
5.8
4.3
5.1
3.6
5.2
6.1
5.6
P/BV
CY11
0.4
0.8
0.8
1.5
1.1
0.8
Gold (INR/10gms)
29,430
Sliver (INR/1kg)
53,826
Lead Spot LME (USD/ton)
1,884
FC 6-8% C basis 60% Cr (USD/lb Cr) 1.18
INR/USD
BDI
5 28,075
-4 55,950
-7 2,020
0
1.19
55.2 -1
55.5
8
50.9
5
52.7
877 -3
904 -6
934
-50
1,738
Source: MMR/LME/Metal Bulletin/SteelPricesIndia/MOSL
Global steel prices weaken further; aluminum spot premium at
5-year high; thermal coal down 15% since December 2011
Global steel prices weakened further. Prices in China, North America
and Turkey are close to their 52-week lows. Steel prices decreased 0.8%,
0.6%, 1.3%, 4.7% and 0.8% WoW in Europe, China, Russia, Middle East
and North America, respectively.
63.5% Fe iron ore prices decreased 1% WoW to USD137/ton while Richards
Bay steam coal prices decreased 1% WoW to the lowest level since
October 2010 to USD90/ton. Despite weakening prices, China's iron ore
BSE Metals Index v/s Sensex
imports increased 11% MoM to 63.9m tons in May.
BSE Metals Index
After sharp sell-off last week, base metal prices increased marginally,
Sensex
except for copper, which declined another 1.5% WoW. Aluminum, zinc
107
and lead prices increased 0.1%, 1.1% and 0.2% WoW, respectively. US
104
aluminum spot premium at USD231/ton is at a 5-year high.
101
The Goa government is expected to finalize the mining policy by the
98
end of June. We expect some clarity on the status of dumps, the export
95
of which has been discontinued since September 2011.
The Indonesian government has set base prices for 20% export tax as
well as allocated quota for exports for the next three months. China's
Source: Bloomberg
alumina imports shot up 2.6x MoM to 720k tons in May due to fears of a
Note: Indexed to 100 on 4 June 2012
ban on bauxite exports from Indonesia.
Stock performance table on pg 22
Sanjay Jain
(SanjayJain@MotilalOswal.com); Tel:+91 22 3982 5412
Pavas Pethia
(Pavas.Pethia@MotilalOswal.com); Tel:+91 22 3982 5413
11 June 2012
1
6.9
5.4
0.6
4.7
4.2
1.0
4.9
4.3
0.9
5.3
4.7
2.4
4.2
3.7
1.6
Source: Bloomberg