Domestic brokerage and research firm ICICI Securities highlighted that in China, both rebar and hot rolled coil (HRC) inventories have declined. Despite the rise in prices, profitability is still below the 50th percentile of the past 15-year period, hence, the brokerage said there could be further hike in prices.
Furthermore, the financing data for both Jan-23 and Feb-23 is better than estimates, hence, the brokerage sees a better possibility of demand picking up.
After remaining circumspect on the sector for the past five months, the brokerage turns optimistic again largely driven by the visible signs of improving demand in China.
Besides, improving spreads and stable prices in India, the brokerage remains positive on improving demand outlook in China.
The main theme of domestic favourable macro front remains unchanged, SHFE aluminium prices showed a ‘v-shaped’ rebound today
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