metals: steel prices ski jumping off steepened chinese slope - motilal oswal

Valuations: Global companiesPrice P/B (x)

CY14 CY15 CY13

MiningBHP AUD 35.79 6.3 5.9 2.2FMG AUD 3.94 4.2 4.5 1.5Rio Tinto AUD 61.89 6.2 5.7 2.0Vale USD 25.24 5.0 4.8 0.9Teck Res . USD 21.35 7.8 6.4 0.7STEEL A. Mitta l EUR 11.055 6.1 5.2 0.5Posco k KRW 361 5.6 5.2 0.7US Steel USD 39.92 5.9 5.2 1.5Nucor USD 54.96 10.7 8.1 2.2JFE JPY 2151.5 7.8 6.8 0.7Gerdau BRL 12.36 7.0 6.3 1.1Bao Steel CNY 4.48 6.1 5.5 0.8NON FERROUSAlcoa USD 16.72 10.0 7.9 1.7Hydro NOK 38.3 10.3 7.8 1.1Rusa l HKD 4.76 15.7 12.3 1.4Note: Detailed on pg 23 Source: Bloomberg

EV/EBITDA (x)

BSE Metals Index v/s Sensex

979899

100101102

15-S

ep

16-S

ep

17-S

ep

18-S

ep

19-S

ep

BSE Metal Sensex

Source: Bloomberg Note: Indexed to 100 on 15 Sep 2014 Stock performance table on pg 24

Investors are advised to refer through disclosures made at the end of the Research Report.

Steel prices ski jumping off steepened Chinese slope Indian long product (Mumbai TMT) prices declined 1% WoW. Although

scrap prices corrected sharply by 2.3% WoW, sponge iron prices were broadly flat. Indian HRC prices were slightly lower as import prices from China declined another USD5/t WoW.

Iron ore prices after gaining mid-week – touching USD85/t – closed the week slightly lower than USD82/t. Coking coal recovered USD2/t closing at USD110/t. Chinese steel prices were down 4 to 6% WoW. This doesn’t augur well for Indian import prices.

EU HRC prices were up by EURO5-10/t over the last two weeks helped by depreciation of currency against USD, while scrap prices declined USD16/t WoW. The spreads for EU mills continue to expand.

LME Aluminum slipped below USD2,000/t, down 3% WoW, with some support from slightly higher cash premiums. Alumina continued to gain strength higher another USD5/t, closing at USD340/t

Copper and Zinc at LME were largely unchanged however Lead declined 2% WoW following the 4% decline the previous week.

Spot copper TCRC is at its 10 month high on increasing supplies (resumption of Indonesia exports).

Sanjay Jain ([email protected]); +91 22 3982 5412/ Dhruv Muchhal ([email protected])

STEE

L M

ETA

LLIC

S A

LUM

. ZI

NC

COPP

ER

OTH

ERS

MIS

C.

Valuations: Indian companiesCompany Price P/B (x)

(INR) FY15E FY16E FY14SteelTata Steel 510 6.4 6.2 2.0SAIL 75 7.7 6.6 0.7JSW Steel 1288 6.6 6.4 1.3JSPL 211 7.5 6.7 0.9NMDC 174 5.7 5.5 2.3Non-FerrousHindalco 164 8.0 6.9 1.4SSLT 284 6.9 6.3 1.2HZL 167 5.6 4.4 1.6Nalco 68 6.4 5.2 1.4Note: Detailed table on pg 23 Source: MOSL

EV/EBITDA (x)

Metals Weekly

22 September 2014

Metal PricesCMP

19-Sep % 12-Sep % 1-Jul % 1-Jan

TMT- Mumbai (INR/ton) 34,900 -1 35,300 -3 35,900 -4 36,300HRC- Mumbai (INR/ton) 34,645 -1 35,054 -5 36,617 -12 39,377HRC (USD/ton) fob CIS 540 0 542 0 538 1 533

Sponge i ron - Ra ipur (INR/ton) 21,550 0 21,600 -1 21,750 6 20,300Pig i ron - Ra ipur (INR/ton) 24,300 -2 24,700 -8 26,550 -3 25,000Iron ore spot (USD/ton) cfr China 82 0 82 -14 95 -39 135Coking coal (USD/ton) fob Aus . 111 2 108 0 111 -16 132Shred. scrap (USD/ton) Rotterdam 352 -4 368 -6 374 -7 378

LME Spot (USD/ton) 1,949 -3 2,008 6 1,837 11 1,753Indian prices (INR ‘000/ton) 119 -3 122 7 110 9 109LME inventories (‘000 ton) 4,672 -1 4,701 -8 5,066 -15 5,468

LME Spot (USD/ton) 2,250 -1 2,270 3 2,194 6 2,116Indian prices (INR ‘000/ton) 137 -1 138 4 132 6 129LME inventories (‘000 ton) 753 0 754 13 667 -16 894

LME Spot (USD/ton) 6,868 0 6,856 -2 7,015 -7 7,375Indian prices (INR ‘000/ton) 416 0 417 -1 422 -10 463LME inventories (‘000 ton) 154 -1 156 -2 157 -58 371

Gold (INR/10gms) 26,518 -2 26,975 -6 28,149 -10 29,312Sl iver (INR/1kg) 40,176 -2 40,858 -10 44,412 -9 43,938Lead Spot LME (USD/ton) 2,068 -2 2,115 -3 2,129 -8 2,259FC 6-8% C bas is 60% Cr (USD/lb Cr) 1.17 0 1.17 2 1.15 14 1.02

INR/USD 60.9 0 61.0 2 59.9 -2 61.9BDI 1,075 -8 1,173 20 894 -53 2,277

Source: Meta l Bul letin, Bloomberg, Steel Mint, MOSL

Week Quarter YTD CY14

22 September 2014 2

Metals Weekly

Contents

Page No. Ferrous 3-10 India 3 & 4 European Union 5 China 6 Other regions 7 & 8 Steel raw material 9 & 10 Ferro alloys 11 Non-ferrous 12-18 Aluminum 12 Copper 14 Zinc 15 Lead 16 Commodity curve analysis 17 China non-ferrous trade data 18 Key indicators 19-20 Industrial production growth across the globe 21 BSE announcements 22 Metals valuation matrix 23 Metals stock performance 24

22 September 2014 3

Metals Weekly

Ferrous INDIA Indian flat steel prices import parity (INR/T, exl. ED & VAT)

33,000

35,000

37,000

39,000

41,000

43,000

Sep-

13

Oct

-13

Nov

-13

Dec

-13

Jan-

14

Feb-

14

Mar

-14

Apr

-14

May

-14

Jun-

14

Jul-

14

Aug

-14

Sep-

14

HRC Mumbai (INR/t)

Indian long steel price (INR/T, exl. ED & VAT)

32,000

34,000

36,000

38,000

Sep-

13

Oct

-13

Nov

-13

Dec

-13

Jan-

14

Jan-

14

Feb-

14

Mar

-14

Apr

-14

May

-14

Jun-

14

Jun-

14

Jul-

14

Aug

-14

Sep-

14

TMT Mumbai (INR/t)

Steel intermediates prices (INR/T, exl. ED & VAT)

19,000

20,000

21,000

22,000

23,000

24,000

Sep-

13

Oct

-13

Nov

-13

Dec

-13

Jan-

14

Feb-

14

Mar

-14

Apr

-14

May

-14

Jun-

14

Jul-

14

Aug

-14

Sep-

14

Sponge (Raipur)

India: Monthly crude steel production

-5.0

0.0

5.0

10.0

15.0

6.25

6.50

6.75

7.00

7.25

Sep-

12

Nov

-12

Jan -

13

Mar

-13

May

-13

Jul-

13

Sep-

13

Nov

-13

Jan-

14

Mar

- 14

May

-14

Jul-

14

YoY

(%)

(m to

ns)

India YoY (%)

Source: SteelMint, WSA, MOSL

India HRC import prices declined further, down

USD5/t WoW to now USD515/t.

TMT (Mumbai) prices remain under pressure on lower China import prices

and were down for the second consecutive week

now. WoW prices contracted by 1.1%.

Sponge iron continues to look sluggish on both lack

of demand and China long product pricing pressure.

Ferrous

Steel demand remains sluggish having grown by

just 0.7% YTD July. Aug flash print indicates YTD

growth at 0.3% (Apr- Aug).

22 September 2014 4

Metals Weekly

Ferrous

INDIA

Scrap Mandi (INR/t)

22,000

23,000

24,000

25,000

26,000

27,000

28,000

Sep-

13

Oct

-13

Nov

-13

Dec

-13

Jan-

14

Feb-

14

Mar

-14

Apr

-14

May

-14

Jun-

14

Jul -

14

Aug

-14

Scrap (Mandi)

Iron ore lumps (INR/t)

4,000

5,000

6,000

7,000

8,000

9,000

Sep-

12

Nov

-12

Jan-

13

Mar

-13

May

-13

Jul-

13

Sep-

13

Nov

-13

Jan-

14

Mar

-14

May

-14

Jul-

14

Sep-

14

NMDC 6-40mm (CG) Lumps 5-18 (Odisha)

Iron ore fines (INR/t) ex mine

1,400

1,800

2,200

2,600

3,000

3,400

Sep-

12

Nov

-12

Feb-

13

May

-13

Jul-

13

Oct

-13

Jan-

14

Mar

-14

Jun-

14

Sep-

14

Fines 63% (Odisha) NMDC Fines

Pellet (Barbil) INR/t

6,000

6,500

7,000

7,500

8,000

8,500

9,000

Dec

-13

Jan-

14

Jan-

14

Feb-

14

Mar

-14

Apr

-14

May

-14

Jun-

14

Jul-

14

Aug

-14

Sep-

14

Pellet (Barbil)

Source: SteelMint, WSA, MOSL

Ferrous

Pellet prices were flat WoW.

Scrap prices saw sharp correction, down 2.3%

WoW. Since July, scrap is down by about INR3,000/t

as against TMT by INR1,000/t and Sponge iron largely unchanged.

Iron ore prices were unchanged as lower

international prices have made domestic iron ore

uneconomical for some of the steel plants.

Prices of iron ore fines by NMDC are unchanged.

22 September 2014 5

Metals Weekly

European Union European HRC prices (EUR/ton)

375

425

475

525

Sep-

12

Nov

-12

Jan-

13

Mar

-13

May

-13

Jun-

13

Aug

-13

Oct

-13

Dec

-13

Feb-

14

Apr

-14

May

-14

Jul-

14

Sep-

14

North Europe HRC South Europe HRC

Rotterdam: shredded scrap prices (USD/t)

320

350

380

410

Sep-

12

Nov

-12

Jan-

13

Mar

-13

May

-13

Jun-

13

Aug

-13

Oct

-13

Dec

-13

Feb-

14

Apr

-14

May

-14

Jul-

14

Sep-

14

European wire rods southern region (Euro/t)

450

470

490

510

530

550

Sep-

12

Nov

-12

Jan-

13

Mar

-13

May

-13

Jul-

13

Sep-

13

Nov

-13

Jan-

14

Mar

-14

May

-14

Jul-

14

Sep-

14

Spreads ( HRC-1.6xiron ore-0.7xcoking coal) – (USD/t)

180

235

290

345

400

Oct

-10

Dec

-10

Feb-

11

Apr

-11

Jun-

11

Aug

-11

Oct

-11

Dec

-11

Feb-

12

Apr

-12

Jun-

12

Aug

-12

Oct

-12

Dec

-12

Feb-

13

Apr

-13

Jun-

13

Aug

-13

Oct

-13

Dec

-13

Feb-

14

Apr

-14

Jun -

14

Aug

-14

EU China

Source: Metal Bulletin, Bloomberg, WSA, MOSL

HRC prices continued to strengthen with prices up

by EURO5-10/t over last two weeks. Dollar strength

is providing support.

Rotterdam scrap saw a sharp decline, down 4.4%, losing USD16/t WoW. Low

iron ore and dollar strength are the factors, in

our view.

South Europe wire rod prices were unchanged

Europe spreads are close to one year high on weak

across the board raw material prices and

strength in HRC on Euro depreciation.

22 September 2014 6

Metals Weekly

China China domestic prices (USD/ton)

400

500

600

700

800

900

Sep-

08

Jan-

09

May

-09

Sep-

09

Jan-

10

May

-10

Sep-

10

Jan-

11

May

-11

Sep-

11

Jan-

12

May

-12

Sep-

12

Jan-

13

May

-13

Sep-

13

Jan-

14

May

-14

Sep-

14

HRC Rebar

Steel spreads (Steel price – 1.6x iron ore – 0.55x coke) for Chinese producers

140

185

230

275

320

Jun-

10

Sep-

10

Dec

-10

Mar

-11

Jun-

11

Sep-

11

Dec

-11

Mar

-12

Jun-

12

Sep-

12

Dec

-12

Mar

-13

Jun-

13

Sep-

13

Dec

-13

Mar

-14

Jun-

14

Sep-

14

HRC Rebar

Steel trade (m ton)

0

2

4

6

8

Sep-

12

Nov

-12

Jan-

13

Mar

-13

May

-13

Jul-

13

Sep-

13

Nov

-13

Jan-

14

Mar

-14

May

-14

Jul-

14

Exports Imports

Steel inventories in main China cities (m tons)

4

5

6

7

8

9

Dec

-12

Mar

-13

May

-13

Jul-

13

Sep-

13

Dec

-13

Feb-

14

Apr

-14

Jul-

14

Sep-

14

China long/flat prices were down by 4-6% WoW. Since July China prices are down

by 10-12%

However spreads remain healthy on weakening iron

ore/coking coal prices

Given weak domestic market, China continues to look to exports. Exports in

July at 7.5mt, were highest in history, up 14% MoM

Steel inventories are declining on tighter credit

22 September 2014 7

Metals Weekly

Other regions

CIS HRC export prices (USD/ton) fob basis

510

520

530

540

550

Oct

-13

Nov

-13

Dec

-13

Jan-

14

Mar

-14

Apr

-14

May

-14

Jun-

14

Jul-

14

Sep-

14

CIS Exports (HRC)

Turkish export billets (USD/ton)

500

520

540

560

Oct

-13

Nov

-13

Dec

-13

Jan-

14

Feb-

14

Mar

-14

Apr

-14

May

-14

Jun-

14

Jul-

14

Aug

-14

Sep-

14

Turkish Exp Billets

North America HRC prices (USD/ton)

600

625

650

675

700

Oct

-13

Nov

-13

Dec

-13

Jan-

14

Feb-

14

Mar

-14

Apr

-14

May

-14

Jun-

14

Jul-

14

Aug

-14

Sep-

14

CIS: Monthly crude steel production

-10

-5

0

5

10

8.0

8.5

9.0

9.5

10.0

Jun-

12

Sep-

12

Nov

-12

Jan-

13

Mar

-13

May

-13

Jul-

13

Sep-

13

Nov

-13

Jan-

14

Mar

-14

May

-14

Jul-

14

YoY

(%)

(m to

ns)

CIS YoY (%)

Source: Metal Bulletin, WSA, Bloomberg, MOSL

CIS export prices were lower by USD2/t WoW

US HRC was down USD5/t and about USD10/t lower

since beginning Sep. Lower international prices is weighting on US HRC.

CIS countries crude steel production growth was

positive for 3rd consecutive month, rising by 2.1% in

July 2014

Turkey billet exports were lower by USD5/t.

22 September 2014 8

Metals Weekly

Other regions

North America: Monthly crude steel production

-15.0

-7.5

0.0

7.5

15.0

9.0

9.5

10.0

10.5

11.0

Jun-

12

Sep-

12

Nov

-12

Jan-

13

Mar

-13

May

-13

Jul-

13

Sep-

13

Nov

-13

Jan-

14

Mar

-14

May

-14

Jul-

14

YoY

(%)

(m to

ns)

North America YoY (%)

Global: Monthly crude steel production

-2

0

2

4

6

8

120

125

130

135

140

145

Jul-

12

Sep-

12

Nov

-12

Jan-

13

Mar

-13

May

-13

Jul-

13

Sep-

13

Nov

-13

Jan-

14

Mar

-14

May

-14

Jul-

14

YoY

(%)

(m to

ns)

Global YoY (%)

Global: Monthly crude steel capacity utilization

69

72

75

78

81

84

Jul-

12

Sep-

12

Nov

-12

Jan-

13

Mar

- 13

May

-13

Jul-

13

Sep-

13

Nov

-13

Jan-

14

Mar

-14

May

-14

Jul-

14

Capacity Utilization

Source: Bloomberg, WSA, MOSL

After 6 consecutive months of positive production growth

momentum, July was slower at 2.2%

Global crude steel production increased 3% YoY to 137m tons in July

Global capacity utilization declined 300bp MoM /

100bp YoY to 75.4% in July

22 September 2014 9

Metals Weekly

Steel raw materials

Import price of 62% grade iron-ore fines in China (USD/ton)

65

80

95

110

125

140

Sep-

13

Oct

-13

Nov

-13

Dec

-13

Dec

-13

Jan-

14

Feb-

14

Mar

-14

Apr

-14

May

-14

May

-14

Jun-

14

Jul-

14

Aug

-14

Sep-

14

CIF FOB

OTC iron-ore swaps (USD/ton)

80859095100105110115

15-M

ar-1

422

-Mar

-14

29-M

ar-1

45-

Apr

-14

12-A

pr-1

419

-Apr

-14

26-A

pr-1

43-

May

-14

10-M

ay-1

417

-May

- 14

24-M

ay-1

431

-May

-14

7-Ju

n-14

14-J

un-1

421

-Jun

-14

28-J

un-1

45-

Jul-

1412

-Jul

-14

19-J

ul-1

426

-Jul

-14

2-A

ug-1

49-

Aug

-14

16-A

ug-1

423

-Aug

-14

30-A

ug-1

46-

Sep-

1413

-Sep

-14

20-S

ep-1

4

2015 1Q15 4Q14

China iron-ore production and imports (m tons)

44

50

56

62

68

30

60

90

120

150

Sep-

12

Nov

-12

Jan-

13

Mar

-13

May

-13

Jul-

13

Sep-

13

Nov

-13

Jan-

14

Mar

-14

May

-14

Jul-

14

Ore Imports Ore Prod Pig iron prod (RHS)

China iron-ore inventories (mt)

60

70

80

90

100

110

Oct

-12

Dec

-12

Feb-

13

Apr

-13

May

-13

Jul-

13

Sep-

13

Nov

-13

Dec

-13

Feb-

14

Apr

-14

Jun-

14

Jul-

14

Source: Metal Bulletin, Bloomberg, MOSL

After gaining strength mid-week, touching USD85/t, iron ore is down back to

USD82/t.

China iron ore inventories are inching higher. Steel mills inventories too are high, according to media

China iron ore imports increased 11% MoM

Iron ore forward prices too fell along with spot prices

22 September 2014 10

Metals Weekly

Steel raw materials

Freight rates to China (USD/ton)

0

8

16

24

32

Sep-

12

Oct

-12

Nov

-12

Dec

-12

Jan-

13

Feb-

13

Mar

-13

Apr

-13

May

-13

Jun-

13

Jul-

13

Aug

-13

Sep-

13

Oct

-13

Nov

-13

Dec

-13

Jan-

14

Feb -

14

Mar

-14

Apr

-14

May

-14

Jun-

14

Jul-

14

Aug

-14

Brazil Australia India

Coal price index

65

75

85

95

Sep-

12

Nov

-12

Jan-

13

Apr

-13

Jun-

13

Aug

-13

Oct

-13

Dec

-13

Feb-

14

Apr

-14

Jul-

14

Sep-

14

Richards Bay Steam Coal

Coke price index (fob China)

180

230

280

330

380

Aug

-12

Oct

-12

Dec

-12

Feb-

13

Apr

-13

Jun-

13

Aug

-13

Oct

-13

Dec

-13

Feb-

14

Apr

-14

Jun-

14

Aug

-14

USD

/t

China coke export spot (LHS)

Coking coal (USD/t)

100

120

140

160

180

Nov

-12

Jan-

13

Mar

-13

May

-13

Jul-

13

Sep-

13

Nov

-13

Jan-

14

Mar

-14

May

-14

Jul-

14

Sep-

14

Spot coking coal (fob Australia)

Coking coal recovered slightly to USD110/t vs. previous week close of

USD108/t

Thermal coal declined further USD1/t now

trading at USD67.9/t. Since July thermal coal is down

by about USD5/t

Bulk sea freights were slightly lower WoW.


Metals Weekly

Ferro alloys

China’s imports of manganese ore and concentrate

130

160

190

220

250

280

500

800

1,100

1,400

1,700

2,000

Oct

-12

Dec

-12

Feb-

13

Apr

-13

Jun-

13

Aug

-13

Oct

-13

Dec

-13

Feb-

14

Apr

-14

Jun-

14

Aug

-14

USD

/t

'000

tons

Imports Prices (RHS)

Chrome ore FOB spot prices

140

160

180

200

Oct

-12

Nov

-12

Dec

-12

Jan-

13

Feb-

13

Mar

-13

May

-13

Jun-

13

Jul-

13

Aug

-13

Sep-

13

Oct

-13

Nov

-13

Jan-

14

Feb-

14

Mar

-14

Apr

-14

May

-14

Jun-

14

Aug

-14

Sep-

14

USD

/ton

40% Chrome Africa

Ferro chrome CIF prices (CNY/t)

5,500

7,000

8,500

10,000

11,500

Oct

-12

Dec

-12

Feb-

13

Apr

-13

Jun-

13

Aug

-13

Oct

-13

Dec

-13

Feb-

14

Apr

-14

Jun-

14

Aug

-14

Fe Chrome 50% Cr China Fe Chrome 63% Cr Pittursburgh

Silico Manganese prices

0.4

0.5

0.6

0.7

Feb-

13

Apr

-13

Jun-

13

Aug

-13

Oct

-13

Dec

-13

Feb-

14

Apr

-14

Jun-

14

Aug

-14

USD

/lb

Silico Manganese in warehouses in Pittsburg USA



Metals Weekly

Non-ferrous

Aluminum LME inventories and spot prices

4.6

4.9

5.2

5.5

1,600

1,800

2,000

2,200

Sep-

13

Oct

-13

Nov

-13

Dec

-13

Jan-

14

Feb-

14

Mar

-14

Apr

-14

May

-14

Jun-

14

Jul-

14

Aug

-14

Sep-

14

m to

nsUSD

/t

Inventories (RHS) Spot

Global primary aluminum monthly production and YoY growth

-2.0

0.5

3.0

5.5

8.0

3,600

3,800

4,000

4,200

4,400

Jul-

12

Sep-

12

Nov

-12

Jan-

13

Mar

-13

May

-13

Jul-

13

Sep-

13

Nov

-13

Jan-

14

Mar

-14

May

-14

Jul-

14

YoY

grow

th (

%)

'000

tons

Production YoY

Aluminum: SHFE Vs LME arbitrage (USD/T)

-100

0

100

200

300

Nov

-12

Jan-

13

Mar

-13

May

-13

Jul-

13

Sep-

13

Nov

-13

Jan-

14

Mar

-14

May

-14

Jul-

14

Sep-

14

India: Company-wise primary aluminum monthly production

43

44

41

45

46

49

49

44

50

34

35

33

34

33

32

33

33

35

35

32

36

34

35

33

35

21

21

21

21

20

21

21

19

21

20

21

21

21

21

21

21

21

22

22

20

22

23

26

25

28

35

35

32

33

33

34

33

31 34

32

28

24

25

25

24

26

26

27

27

24 27

26

27

26

28

45

45

44

45

44

46

46

40 46

44

45

45

45

45

45

46

45

46

46

42 46

45

46

45

46

Jul-

12

Sep-

12

Nov

-12

Jan-

13

Mar

-13

May

-13

Jul-

13

Sep-

13

Nov

-13

Jan-

14

Mar

-14

May

-14

Jul-

14

'000

tons

Hindalco Balco Nalco SSLT

Non-ferrous

LME slipped below USD2,000/t, down 3% WoW, to now

USD1,950/t.

Global metal production growth has been

moderating with July growth at 1.2% YoY vs

June 2.2%


Metals Weekly

Non-ferrous

Aluminum Aluminum raw material and power cost for marginal producer in USA (USD/t)

0

800

1,600

2,400

3,200

Oct

-09

Dec

-09

Mar

-10

May

-10

Aug

-10

Oct

-10

Jan-

11

Mar

-11

Jun-

11

Aug

-11

Nov

-11

Jan -

12

Apr

-12

Jun-

12

Aug

-12

Nov

-12

Jan-

13

Apr

-13

Jun-

13

Sep-

13

Nov

-13

Feb-

14

Apr

-14

Jul-

14

Sep-

14

CPC Alumina Power LME+Spot

CPC US (USD/t)

200

300

400

500

600

Jun-

09

Sep-

09

Dec

-09

Mar

-10

Jun-

10

Sep-

10

Dec

-10

Mar

-11

Jun-

11

Sep-

11

Dec

-11

Mar

-12

Jun-

12

Sep-

12

Dec

-12

Mar

-13

Jun-

13

Sep-

13

Dec

-13

Mar

-14

Jun-

14

Sep-

14

Alumina (USD/t)

160

240

320

400

480

Jun-

09

Oct

-09

Jan-

10

May

-10

Sep-

10

Jan-

11

Apr

-11

Aug

-11

Dec

-11

Apr

-12

Jul-

12

Nov

-12

Mar

-13

Jun-

13

Oct

-13

Feb-

14

Jun-

14

Sep-

14

Industrial power US (Lousiana) (USc/kwh)

4.0

5.0

6.0

7.0

8.0

9.0

Jun-

09

Oct

-09

Jan-

10

May

-10

Sep-

10

Jan-

11

Apr

-11

Aug

-11

Dec

-11

Apr

-12

Jul-

12

Nov

-12

Mar

-13

Jun-

13

Oct

-13

Feb-

14

Jun-

14

Sep-

14

Source: Metal Bulletin, Bloomberg, Industry, MOSL

Aluminum product spreads remain attractive

Alumina was higher another USD5/t WoW

trading at USD340/t


Metals Weekly

Non-ferrous

Copper LME inventories and prices

0.1

0.2

0.3

0.4

0.5

0.6

0.7

6,000

6,250

6,500

6,750

7,000

7,250

7,500

Sep-

13

Oct

-13

Nov

-13

Dec

-13

Jan-

14

Feb-

14

Mar

-14

Apr

-14

May

-14

Jun-

14

Jul-

14

Aug

-14

Sep-

14

m to

ns

USD

/t


Global refined copper monthly production and YoY growth

-2.5

0.0

2.5

5.0

7.5

10.0

1.4

1.5

1.6

1.7

1.8

1.9

2.0

Aug

-12

Oct

-12

Dec

-12

Feb-

13

Apr

-13

Jun-

13

Aug

-13

Oct

-13

Dec

-13

Feb-

14

Apr

-14

Jun-

14

YoY

grow

th (

%)

m to

ns

Production YoY - RHS

China: Refined copper monthly production and YoY growth

-8

3

14

25

36

0.30

0.37

0.44

0.51

0.58

0.65

0.72

Sep-

12

Nov

-12

Jan-

13

Mar

-13

May

-13

Jul-

13

Sep-

13

Nov

-13

Jan-

14

Mar

-14

May

-14

Jul-

14

YoY

grow

th (

%)

m to

ns


Copper: Spot TCRC (USc/lb)

22.0

24.0

26.0

28.0

30.0

32.0

34.0

Sep-

13

Oct

-13

Nov

-13

Dec

-13

Dec

-13

Jan-

14

Feb-

14

Feb-

14

Mar

-14

Apr

-14

Apr

-14

May

-14

Jun-

14

Jun-

14

Jul-

14

Aug

-14

Sep-

14

LME was largely unchanged. Inventories

were also flat WoW.

July production growth picked pace higher by 7.4%

YoY vs. 5.7% increase in June

Spot TCRC rose to 10 month high on increasing

supplies following the resumption of exports

from Indonesia while demand remains largely

unchanged.


Metals Weekly

Non-ferrous

Zinc LME inventories and prices

0.6

0.8

0.9

1.1

1.2

1,800

2,000

2,200

2,400

2,600

Sep-

13

Oct

-13

Nov

-13

Dec

-13

Jan-

14

Feb -

14

Mar

-14

Apr

-14

May

-14

Jun-

14

Jul-

14

Aug

-14

Sep-

14

m to

ns

USD

/t


Global refined zinc monthly production and YoY growth

-10.0

-4.0

2.0

8.0

14.0

0.9

1.0

1.1

1.1

1.2

Aug

-12

Sep-

12O

ct-1

2N

ov-1

2D

ec-1

2Ja

n-13

Feb-

13M

ar-1

3A

pr-1

3M

ay-1

3Ju

n-13

Jul-

13A

ug-1

3Se

p -13

Oct

-13

Nov

-13

Dec

-13

Jan-

14Fe

b-14

Mar

-14

Apr

-14

May

-14

Jun-

14Ju

l-14

YoY

grow

th (

%)

m to

ns

Production YoY growth (RHS)

China: Refined zinc monthly production and YoY growth

-22

-2

19

40

0.3

0.4

0.4

0.5

Sep-

12

Nov

-12

Jan-

13

Mar

-13

May

-13

Jul-

13

Sep-

13

Nov

-13

Jan-

14

Mar

-14

May

-14

Jul-

14

YoY

grow

th (

%)

m to

ns

Production YoY growth (RHS)

Zinc: Global metal surplus/(deficit) - kt

-150

-100

-50

0

50

100

150

Aug

-12

Sep-

12

Oct

-12

Nov

-12

Dec

-12

Jan -

13

Feb-

13

Mar

-13

Apr

-13

May

-13

Jun-

13

Jul-

13

Aug

-13

Sep-

13

Oct

-13

Nov

-13

Dec

-13

Jan-

14

Feb-

14

Mar

-14

Apr

-14

May

-14

Jun-

14<--d

efic

it

(k

t)

sur

plus

-->

After sharp decline last week, LME was broadly

flat.

July Zinc production growth came at 3.1% YoY,

slightly slower than 3.8% growth recorded in June.

Zinc market remains a deficit since March 14.

Deficit in May increased to 93kt declining to 29kt in

June.


Metals Weekly

Non-ferrous

Lead LME inventories and prices

0.15

0.18

0.20

0.23

0.25

1,900

2,000

2,100

2,200

2,300

Sep-

13

Oct

-13

Nov

-13

Dec

-13

Jan-

14

Feb-

14

Mar

-14

Apr

-14

May

-14

Jun-

14

Jul-

14

Aug

-14

Sep-

14

m to

ns

USD

/t


Global refined lead monthly production and YoY growth

-15

-5

5

15

25

0.6

0.7

0.8

0.9

1.0

Aug

-12

Nov

-12

Jan-

13

Mar

-13

May

-13

Jul-

13

Sep-

13

Nov

-13

Jan-

14

Mar

-14

May

-14

Jul-

14

YoY

grow

th (

%)

m to

ns


China: Refined lead monthly production and YoY growth

-40

-20

0

20

40

0.2

0.3

0.4

0.5

Aug

-12

Sep-

12O

ct-1

2N

ov-1

2D

ec-1

2Ja

n-13

Feb-

13M

ar-1

3A

pr-1

3M

ay-1

3Ju

n-13

Jul-

13A

ug-1

3Se

p-13

Oct

-13

Nov

-13

Dec

-13

Jan-

14Fe

b-14

Mar

-14

Apr

-14

May

-14

Jun-

14Ju

l-14

YoY

grow

th (

%)

m to

ns


:

India: Company-wise refined lead monthly production

6 9

11 11 10 9 9 12 12

10 12 12 11 9 9 6 7

12 11 11 14

10 10 11 11

Jul-

12

Aug

-12

Sep-

12

Oct

-12

Nov

-12

Dec

-12

Jan-

13

Feb-

13

Mar

-13

Apr

-13

May

-13

Jun-

13

Jul-

13

Aug

-13

Sep-

13

Oct

-13

Nov

-13

Dec

-13

Jan-

14

Feb-

14

Mar

-14

Apr

-14

May

-14

Jun-

14

Jul-

14

HZL


Following the 4% decline previous week, Lead

continued to slide down further 2% during the

week.

In July production declined by 2.4% YoY. This follows

2.1% YoY growth posted in June.


Metals Weekly

Commodity forward curves LME aluminum (USD/ton)

1,800

2,000

2,200

2,400

11/2

014

3/20

15

7/20

15

11/2

015

3/20

16

7/20

16

11/2

016

3/20

17

7/20

17

11/2

017

3/20

18

7/20

18

11/2

018

3/20

19

7/20

19

11/2

019

Current 1-week ago 3-month ago

LME copper (USD/ton)

6,600

6,700

6,800

6,900

7,000

7,100

7,200

11/2

014

3/20

15

7/20

15

11/2

015

3/20

16

7/20

16

11/2

016

3/20

17

7/20

17

11/2

017

3/20

18

7/20

18

11/2

018

3/20

19

7/20

19

11/2

019


LME zinc futures (USD/ton)

2,000 2,050 2,100 2,150 2,200 2,250 2,300 2,350

11/2

014

3/20

15

7/20

15

11/2

015

3/20

16

7/20

16

11/2

016

3/20

17

7/20

17

11/2

017

3/20

18

7/20

18

11/2

018

3/20

19

7/20

19

11/2

019


Base metals US spot premium (USD/ton)

40

115

190

265

340

415

490

Dec

-07

Apr

-08

Aug

-08

Dec

-08

Apr

-09

Aug

-09

Dec

-09

Apr

-10

Aug

-10

Dec

-10

Apr

-11

Aug

-11

Dec

-11

Apr

-12

Aug

-12

Dec

-12

Apr

-13

Aug

-13

Dec

-13

Apr

-14

Aug

-14

Aluminium Zinc Copper



Metals Weekly

China non-ferrous trade data

China’s aluminum trade ('000 tons)

0

100

200

300

400

Jul-

12

Oct

-12

Dec

-12

Feb-

13

Apr

-13

Jun-

13

Aug

-13

Oct

-13

Dec

-13

Feb-

14

Apr

-14

Jun-

14

Aug

-14

Imports Exports

China’s refined copper trade ('000 tons)

0

100

200

300

400

500

Jul-

12

Sep-

12

Nov

-12

Jan-

13

Mar

- 13

May

-13

Jul-

13

Sep-

13

Nov

-13

Jan-

14

Mar

-14

May

-14

Jul-

14

Imports Exports

China’s refined zinc trade ('000 tons)

0

25

50

75

100

Sep-

12

Dec

-12

Feb-

13

Apr

-13

Jun-

13

Aug

-13

Oct

-13

Dec

-13

Feb-

14

Apr

-14

Jun-

14

Aug

-14

Export Import

China’s alumina imports ('000 tons) and prices (USD/ton)

0

200

400

600

800

Sep-

12

Dec

-12

Feb-

13

Apr

-13

Jun-

13

Aug

-13

Oct

-13

Dec

-13

Feb-

14

Apr

-14

Jun-

14

Aug

-14


Unwrought aluminum exports were higher by

10kt MoM to 390kt

China alumina imports were flat WoW


Metals Weekly

Key indicators China new loan growth (Yuan b)

300

600

900

1,200

1,500

Jun-

12

Aug

-12

Oct

-12

Dec

-12

Feb-

13

Apr

-13

Jun-

13

Aug

-13

Oct

-13

Dec

-13

Feb-

14

Apr

-14

Jun-

14

China: PMI

38

44

50

56

62

46

48

50

52

54

Sep-

12

Nov

-12

Jan-

13

Mar

-13

May

-13

Jul-

13

Sep-

13

Nov

-13

Jan-

14

Mar

-14

May

-14

Jul-

14

Stee

l PM

I

Mfg

PM

I

Mfg PMI Steel PMI

China: Fixed asset investment growth (%)

16

18

20

22

Aug

-12

Oct

-12

Dec

-12

Feb-

13

Apr

-13

Jun-

13

Aug

-13

Oct

-13

Dec

-13

Feb-

14

Apr

-14

Jun-

14

Aug

-14

Currency movement with respect to the rupee

65

74

83

92

101

110

51

55

59

63

67

71

Sep-

13

Oct

-13

Nov

-13

Dec

-13

Jan-

14

Mar

-14

Apr

-14

May

-14

Jun-

14

Jul-

14

Aug

-14

Sep-

14

INR

INR

USD (LHS) GBP EURO

Source: Bloomberg, MOSL

Fixed asset investment growth has slowed to 17%

over the last few months

China steel PMI remained in contracted mode for the

4th consecutive month. Aug print came at 48.4


Metals Weekly

Key indicators (Contd...) China Energy Production Electricity (b kwh)

-10

0

10

20

30

40

50

200 250 300 350 400 450 500 550

May

-11

Jul-

11

Sep-

11

Nov

-11

Jan-

12

Mar

-12

May

-12

Jul-

12

Sep-

12

Nov

-12

Jan-

13

Mar

-13

May

-13

Jul-

13

Sep-

13

Nov

-13

Jan-

14

Mar

-14

May

-14

Jul-

14

Electricity YoY (%, RHS)

China Monthly Trade YoY (%)

-20

0

20

40

Sep-

12

Dec

-12

Mar

-13

May

-13

Jul-

13

Oct

-13

Dec

-13

Mar

-14

May

-14

Aug

-14

Import Export

China Price Index YoY (%)

-6

-3

0

3

6

Sep-

12

Nov

-12

Dec

-12

Feb-

13

Mar

-13

May

-13

Jun-

13

Aug

-13

Sep-

13

Nov

-13

Dec

-13

Feb-

14

Mar

-14

May

-14

Jun-

14

Aug

-14

PPI CPI

China GDP YoY (%)

7.2

7.6

8.0

8.4

8.8

9.2

9.6

Sep-

11

Dec

-11

Mar

-12

Jun-

12

Sep-

12

Dec

-12

Mar

-13

Jun-

13

Sep-

13

Dec

-13

Mar

-14

Jun-

14


China’s GDP growth was 7.5% in 2QCY14

China electricity production growth

decelerated to 3.4% YoY in Aug from 18.7% growth

recorded in July.


Metals Weekly

Industrial production growth The UK and the USA (%)

-6

-3

0

3

6

Sep-

12

Nov

-12

Jan-

13

Mar

-13

May

-13

Jul-

13

Sep-

13

Nov

-13

Jan-

14

Mar

-14

May

-14

Jul-

14

UK USA

Japan (%)

-20

-10

0

10

20

Sep-

12

Dec

-12

Feb-

13

Apr

-13

Jun-

13

Aug

-13

Oct

-13

Dec

-13

Feb-

14

Apr

-14

Jun-

14

Aug

-14

European Union (%)

-16

-10

-4

2

8

Aug

-12

Oct

-12

Dec

-12

Feb-

13

Apr

-13

Jun-

13

Aug

-13

Oct

-13

Dec

-13

Feb-

14

Apr

-14

Jun-

14

Aug

-14

France Germany Italy

BRIC (%)

-7

0

7

14

Aug

-12

Oct

-12

Dec

-12

Feb-

13

Apr

-13

Jun-

13

Aug

-13

Oct

-13

Dec

-13

Feb-

14

Apr

-14

Jun-

14

Aug

-14

Russia Brazil India China


China’s industrial production decelerated

sharply by 210bps MoM to 6.9%


Metals Weekly

Stock exchange announcements JSW Steel: JSW Steel clarified that it has submitted a binding bid for the take-

over of the rolling mills of Piombini Plant of Lucchini in Italy. The acquisition is in line with its long term strategy to acquire finishing mills near to the market, the company mentioned.

Hindalco: The company said 6 of its bauxite mines in Jharkhand were ordered to

stop operating by the state government, in compliance with the amendment to the MMDR Act which does away with the second deemed extension provision. The company further mentioned that it had applied for the license renewals as per the requirement of the law and the application is under consideration of the state government. It expects renewals to be granted within six months and has sufficient inventory to maintain production for the period. The mines closed supplied to its refineries in Muri and Renukoot. The company also mentioned that the other operating mines in the area could also supply bauxite to the two refineries.


Metals Weekly

Price(INR) FY14E FY15E FY16E FY15E FY16E FY15E FY16E FY14E FY15E

SteelTata Steel Buy 510 8,133 35.5 39.5 49.0 12.9 10.4 6.4 6.2 2.0 1.5SAIL Neutra l 75 4,130 4.6 7.5 8.1 9.9 9.2 7.7 6.6 0.7 0.7JSW Steel Buy 1288 5,111 34.4 139.7 137.8 9.2 9.3 6.6 6.4 1.3 1.1JSPL Buy 211 3,169 20.9 23.6 30.6 8.9 6.9 7.5 6.7 0.9 0.8NMDC Buy 174 11,325 16.1 18.2 18.6 9.6 9.4 5.7 5.5 2.3 2.1

Non-FerrousHindalco Buy 164 5,559 12.5 13.3 15.0 12.4 10.9 8.0 6.9 1.4 1.3SSLT Buy 284 13,822 17.2 23.5 24.1 12.0 11.8 6.9 6.3 1.2 1.1Hindustan Zinc Buy 167 11,583 16.3 17.9 18.1 9.3 9.2 5.6 4.4 1.6 1.4Nalco Buy 68 2,877 2.6 5.1 5.6 13.5 12.1 6.4 5.2 1.4 1.3

Valuations: Indian Companies

CMP=current market price Source: MOSL

P/B(x)Rating

MCAP (USD M)

EPS P/E (x) EV/EBITDA (x)

Valuations: Global CompaniesCompany BBG P/BV (x)

CODE CUR YR NXT YR CUR YR NXT YR CY13MiningBHP-Bi l l i ton BHP AU AUD 36 167,403 12.7 13.2 6.3 5.9 2.2FMG FMG AU AUD 4 11,207 4.1 6.4 4.2 4.5 1.5Rio Tinto RIO AU AUD 62 97,883 10.6 10.1 6.2 5.7 2.0Vale Vale US USD 25 61,345 6.7 6.6 5.0 4.8 0.9Teck Resources TCK US USD 21 12,321 27.2 15.7 7.8 6.4 0.7STEEL Arcelor Mitta l MT NA EUR 11 23,870 19.5 12.9 6.1 5.2 0.5Posco 005490 KS k KRW 361 29,892 18.2 14.2 5.6 5.2 0.7US Steel X US USD 40 5,793 19.5 14.5 5.9 5.2 1.5Nucor NUE US USD 55 17,524 26.8 16.6 10.7 8.1 2.2JFE 5411 JT JPY 2,152 12,331 11.9 10.3 7.8 6.8 0.7Gerdau GGBR4 BZ BRL 12 8,592 16.2 13.1 7.0 6.3 1.1Bao Steel 600019 CH CNY 4 12,004 10.3 9.0 6.1 5.5 0.8NON FERROUSAlcoa AA US USD 17 19,668 26.8 19.3 10.0 7.9 1.7Norsk Hydro NHY NO NOK 38 12,450 35.6 18.6 10.3 7.8 1.1Rusa l 486 HK HKD 5 9,193 17.3 10.3 15.7 12.3 1.4

Source: Bloomberg

EV/EBITDA(x)Currency PRICE

MCAP (US$ M)

PE (x)

Metals Valuation Matrix


Metals Weekly

Metals stock performance on absolute and relative basis (%)

Months 1 3 6 12 1 3 6 12SteelTata Steel -6.2 -1.7 43.3 64.4 -8.7 -9.2 19.2 33.2SAIL -14.4 -21.3 32.0 46.6 -16.9 -28.8 8.0 15.4JSW Steel 0.2 4.5 32.5 78.2 -2.3 -3.0 8.4 46.9JSPL -28.7 -33.6 -20.3 -18.9 -31.2 -41.1 -44.3 -50.1NMDC -1.5 -1.5 32.7 42.1 -4.1 -9.0 8.6 10.9Non-FerrousSSLT -4.4 -3.9 61.2 52.8 -7.0 -11.4 37.1 21.6Hindustan Zinc -1.3 4.2 37.9 28.4 -3.9 -3.3 13.8 -2.8Nalco 16.5 21.6 95.8 106.5 14.0 14.1 71.7 75.3Hindalco -9.2 -1.8 37.0 38.7 -11.7 -9.3 12.9 7.5Mid CapsMonnet Ispat -22.8 -23.9 63.3 -21.7 -25.4 -31.4 39.2 -52.9Godawari -1.0 16.7 120.5 104.9 -3.5 9.2 96.4 73.7Sarda Energy -31.6 6.2 146.4 182.8 -34.1 -1.3 122.3 151.6Tata Sponge 16.2 57.1 108.8 263.1 13.7 49.6 84.7 231.9Adhunik Meta l iks -10.0 -16.3 6.8 51.1 -12.6 -23.8 -17.2 19.9Bhushan Steel -13.8 -69.1 -72.5 -74.5 -16.4 -76.6 -96.6 -105.8Ja i Ba la ji -28.1 -25.0 68.3 4.4 -30.6 -32.4 44.2 -26.8Rain Industries 29.2 28.9 63.0 44.6 26.6 21.4 39.0 13.4Prakash Industries -15.6 -31.5 80.5 104.9 -18.1 -39.0 56.4 73.7SENSEX 2.5 7.5 24.1 31.2 - - - -

Absolute Perf (%) Relative Perf to Sensex (%)

Global Metals stock performance on absolute basis (%)

1week 1month 3 months 6 months 7 months 12 months MiningRio Tinto -0.8 -6.9 3.2 1.1 1.2 1.2BHP Bi l l i ton -0.9 -10.6 -2.6 -1.1 -3.3 -3.3Vale -2.4 -13.5 -6.7 -5.1 -27.4 -27.4FMG -4.6 -18.6 -10.9 -24.6 -17.9 -17.9Anglo American -0.7 -6.7 1.4 6.0 -10.0 -10.0Vedanta -5.5 -1.2 -10.2 22.5 -13.9 -13.9SteelUS Steel 13.2 20.0 77.8 76.3 113.5 113.5Nucor 4.9 6.7 11.5 16.3 14.8 14.8Arcelor Mitta l 4.9 8.9 4.3 5.3 6.8 6.8Bao Steel -1.6 -2.2 12.5 22.2 1.6 1.6Posco -0.8 6.2 22.4 25.0 8.8 8.8JFE Holdings 5.5 6.0 10.3 19.5 -17.2 -17.2Nippon 2.4 -3.4 -9.0 8.4 -14.2 -14.2Thyssen Krupp 1.3 2.3 1.9 21.2 26.3 26.3Voest Alpine 0.1 6.7 -5.1 5.2 -4.1 -4.1Gerdau 0.6 -5.3 -13.6 -12.2 -29.2 -29.2AluminiumAlcoa -3.1 -1.3 12.1 36.9 92.1 92.1Rusa l -0.4 17.0 25.4 82.3 108.8 108.8Chalco -5.4 -3.5 19.6 26.4 20.5 20.5

Source: MOSL, Bloomberg

Absolute Perf (%)

Metals Stock Performance

Among large-cap companies, Nalco had the strongest

performance over the last one month, while JSPL was the

weakest amid concerns over coal block de-allocation

Among mid-cap companies, Rain Industries has outperformed

and Sarda Energy has underperformed over one month

Among global mining companies, Anglo was the best performer,

while Vedanta was the worst performing stock over one month

Among global steel majors, US Steel was the best performer, while Bao Steel was the worst

performing stock over the last one month

Among the global aluminum, Chalco has been the worst performer over one month


Metals Weekly

N O T E S


Metals Weekly

Disclosures This research report has been prepared by MOSt to provide information about the company(ies) and sector(s), if any, covered in the report and may be distributed by it and/or its affiliated company(ies). This report is for personal information of the select recipient and does not construe to be any investment, legal or taxation advice to you. This research report does not constitute an offer, invitation or inducement to invest in securities or other investments and Motilal Oswal Securities Limited (hereinafter referred as MOSt) is not soliciting any action based upon it. This report is not for public distribution and has been furnished to you solely for your general information and should not be reproduced or redistributed to any other person in any form. This report does not constitute a personal recommendation or take into account the particular investment objectives, financial situations, or needs of individual clients. Before acting on any advice or recommendation in this material, investors should consider whether it is suitable for their particular circumstances and, if necessary, seek professional advice. The price and value of the investments referred to in this material and the income from them may go down as well as up, and investors may realize losses on any investments. Past performance is not a guide for future performance, future returns are not guaranteed and a loss of original capital may occur.

MOSt and its affiliates are a full-service, integrated investment banking, investment management, brokerage and financing group. We and our affiliates have investment banking and other business relationships with a significant percentage of the companies covered by our Research Department Our research professionals provide important input into our investment banking and other business selection processes. Investors should assume that MOSt and/or its affiliates are seeking or will seek investment banking or other business from the company or companies that are the subject of this material and that the research professionals who were involved in preparing this material may participate in the solicitation of such business. The research professionals responsible for the preparation of this document may interact with trading desk personnel, sales personnel and other parties for the purpose of gathering, applying and interpreting market information. Our research professionals are paid in part based on the profitability of MOSt which include earnings from investment banking and other business. MOSt generally prohibits its analysts, persons reporting to analysts, and members of their households from maintaining a financial interest in the securities or derivatives of any companies that the analysts cover. Additionally, MOSt generally prohibits its analysts and persons reporting to analysts from serving as an officer, director, or advisory board member of any companies that the analysts cover. Our salespeople, traders, and other professionals or affiliates may provide oral or written market commentary or trading strategies to our clients that reflect opinions that are contrary to the opinions expressed herein, and our proprietary trading and investing businesses may make investment decisions that are inconsistent with the recommendations expressed herein. In reviewing these materials, you should be aware that any or all o the foregoing, among other things, may give rise to real or potential conflicts of interest . MOSt and its affiliated company(ies), their directors and employees may; (a) from time to time, have a long or short position in, and buy or sell the securities of the company(ies) mentioned herein or (b) be engaged in any other transaction involving such securities and earn brokerage or other compensation or act as a market maker in the financial instruments of the company(ies) discussed herein or act as an advisor or lender/borrower to such company(ies) or may have any other potential conflict of interests with respect to any recommendation and other related information and opinions.

Unauthorized disclosure, use, dissemination or copying (either whole or partial) of this information, is prohibited. The person accessing this information specifically agrees to exempt MOSt or any of its affiliates or employees from, any and all responsibility/liability arising from such misuse and agrees not to hold MOSt or any of its affiliates or employees responsible for any such misuse and further agrees to hold MOSt or any of its affiliates or employees free and harmless from all losses, costs, damages, expenses that may be suffered by the person accessing this information due to any errors and delays. The information contained herein is based on publicly available data or other sources believed to be reliable. Any statements contained in this report attributed to a third party represent MOSt’s interpretation of the data, information and/or opinions provided by that third party either publicly or through a subscription service, and such use and interpretation have not been reviewed by the third party. This Report is not intended to be a complete statement or summary of the securities, markets or developments referred to in the document. While we would endeavor to update the information herein on reasonable basis, MOSt and/or its affiliates are under no obligation to update the information. Also there may be regulatory, compliance, or other reasons that may prevent MOSt and/or its affiliates from doing so. MOSt or any of its affiliates or employees shall not be in any way responsible and liable for any loss or damage that may arise to any person from any inadvertent error in the information contained in this report. MOSt or any of its affiliates or employees do not provide, at any time, any express or implied warranty of any kind, regarding any matter pertaining to this report, including without limitation the implied warranties of merchantability, fitness for a particular purpose, and non-infringement. The recipients of this report should rely on their own investigations.

Recipients who are not institutional investors should seek advice of their independent financial advisor prior to taking any investment decision based on this report or for any necessary explanation of its contents.

MOSt and/or its affiliates and/or employees may have interests/positions, financial or otherwise in the securities mentioned in this report. To enhance transparency, MOSt has incorporated a Disclosure of Interest Statement in this document. This should, however, not be treated as endorsement of the views expressed in the report.

Disclosure of Interest Statement Companies where there is interest Analyst ownership of the stock Sesa Sterlite

Analyst Certification The views expressed in this research report accurately reflect the personal views of the analyst(s) about the subject securities or issues, and no part of the compensation of the research analyst(s) was, is, or will be directly or indirectly related to the specific recommendations and views expressed by research analyst(s) in this report. The research analysts, strategists, or research associates principally responsible for preparation of MOSt research receive compensation based upon various factors, including quality of research, investor client feedback, stock picking, competitive factors and firm revenues.

Regional Disclosures (outside India) This report is not directed or intended for distribution to or use by any person or entity resident in a state, country or any jurisdiction, where such distribution, publication, availability or use would be contrary to law, regulation or which would subject MOSt & its group companies to registration or licensing requirements within such jurisdictions.

For U.K. This report is intended for distribution only to persons having professional experience in matters relating to investments as described in Article 19 of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (referred to as "investment professionals"). This document must not be acted on or relied on by persons who are not investment professionals. Any investment or investment activity to which this document relates is only available to investment professionals and will be engaged in only with such persons.

For U.S. Motilal Oswal Securities Limited (MOSL) is not a registered broker - dealer under the U.S. Securities Exchange Act of 1934, as amended (the"1934 act") and under applicable state laws in the United States. In addition MOSL is not a registered investment adviser under the U.S. Investment Advisers Act of 1940, as amended (the "Advisers Act" and together with the 1934 Act, the "Acts), and under applicable state laws in the United States. Accordingly, in the absence of specific exemption under the Acts, any brokerage and investment services provided by MOSL, including the products and services described herein are not available to or intended for U.S. persons.

This report is intended for distribution only to "Major Institutional Investors" as defined by Rule 15a-6(b)(4) of the Exchange Act and interpretations thereof by SEC (henceforth referred to as "major institutional investors"). This document must not be acted on or relied on by persons who are not major institutional investors. Any investment or investment activity to which this document relates is only available to major institutional investors and will be engaged in only with major institutional investors. In reliance on the exemption from registration provided by Rule 15a-6 of the U.S. Securities Exchange Act of 1934, as amended (the "Exchange Act") and interpretations thereof by the U.S. Securities and Exchange Commission ("SEC") in order to conduct business with Institutional Investors based in the U.S., MOSL has entered into a chaperoning agreement with a U.S. registered broker-dealer, Motilal Oswal Securities International Private Limited. ("MOSIPL"). Any business interaction pursuant to this report will have to be executed within the provisions of this chaperoning agreement.

The Research Analysts contributing to the report may not be registered /qualified as research analyst with FINRA. Such research analyst may not be associated persons of the U.S. registered broker-dealer, MOSIPL, and therefore, may not be subject to NASD rule 2711 and NYSE Rule 472 restrictions on communication with a subject company, public appearances and trading securities held by a research analyst account.

For Singapore Motilal Oswal Capital Markets Singapore Pte Limited is acting as an exempt financial advisor under section 23(1)(f) of the Financial Advisers Act(FAA) read with regulation 17(1)(d) of the Financial Advisors Regulations and is a subsidiary of Motilal Oswal Securities Limited in India. This research is distributed in Singapore by Motilal Oswal Capital Markets Singapore Pte Limited and it is only directed in Singapore to accredited investors, as defined in the Financial Advisers Regulations and the Securities and Futures Act (Chapter 289), as amended from time to time. In respect of any matter arising from or in connection with the research you could contact the following representatives of Motilal Oswal Capital Markets Singapore Pte Limited: Anosh Koppikar Kadambari Balachandran Email:[email protected] Email : [email protected] Contact(+65)68189232 Contact: (+65) 68189233 / 65249115 Office Address:21 (Suite 31),16 Collyer Quay,Singapore 04931

Motilal Oswal Securities Ltd

Motilal Oswal Tower, Level 9, Sayani Road, Prabhadevi, Mumbai 400 025 Phone: +91 22 3982 5500 E-mail: [email protected]

metals: steel prices ski jumping off steepened chinese slope - motilal oswal

Economy & Finance