Metal Companies Yet To Show Their Mettle

Mirroring the global scenario, metal majors in India reported a tepid September quarter

- Satya Sontanam

The ongoing US-China trade war, uncertainties around Brexit and dampened global economic environment continued to impact global metal consumption and prices during the quarter ended September.

The domestic consumption, too, was hit by the slowdown in user industries such as automotive, building and construction and electrics. While reduced fuel and power costs — due to a fall in imported coal rates — lowered the production cost for Indian metal players, a decline in realizations and sales more than offset the gain, impacting earnings.

Hindalco, Vedanta, and Hindustan Zinc recorded a fall of 19 per cent, 32 per cent and 8 per cent (yo-y), respectively, in consolidated profits (before tax) in Q2FY20. NALCO recorded a loss (before tax) of ₹47 crore against a profit of ₹824 crore during the same quarter last year.

Aluminium

In Q2FY20, the global primary aluminium consumption declined 0.2 per cent against an increase of around 4 per cent during the same period last year. Resultantly, the average LME aluminium price fell about 14 per cent to $1,762 per tonne during the quarter ended September 30.