Metal industry braced for higher profits

The Indian metal industry is poised for increased profitability in the next year due to increasing global demand.

This in turn is expected to translate into improved margins. According to a study done by Crisil Ratings, the global steel and non-ferrous metals sector will witness high operating rates and existing price trend will continue in the medium term.

While the domestic steel industry is expected to grow by around 6-7 per cent, other base metals zinc and aluminium are set for a annual growth of 5 per cent. The copper industry, for which there is a high demand from China, is targetting a growth of around 3-4 per cent.

Although China will continue to fuel the global metal demand, the recovery of the US economy and other upcoming markets in Europe will also boost the industry, a senior Crisil analyst said.

The Crisil study also expects a substantial rise in global zinc and copper prices but has maintained a conservative outlook for aluminium prices in the coming months.

However, reduction in existing import duty will impact steel and non-ferrous metal manufacturers.