Commodity and Cyclical Plays


(Devaki Nandan Tripathy) #644

Anyone here tracking the chlor-alkali cycle?


(manivannan.g) #645

HINDCOPPER is trading at 63 PE, could you pls help me to understand how you arrived at throwaway valuations.


(Amit) #646

Earning has been really disappointing in the past…

Price has reached the floor…40-50 range is bottom…Dont judge commodities investment as high pe…high pe is actually a sign that it has bottomed…low pe is a sign that earnings have peaked…copper supply long term till 2028 looking poor…demandwill only grow from here…new mines not coming…existing coppee grades falling…hind copper is a monopoly in india…


(Devang) #647

Hi the steel story seems to be continuing and the steel prices are also presently supporting with overall pick u in production and demand. Results expected are good but then why the stock prices are turning down. the nifty metal has corrected a lot. Tata steel touching 52w low JSPL, JSW steel all down. What’s going on actually. Is it trade wars?


(adeepsandhu) #648

Steel market is beginning to correct due to lack of demand. Already Unofficially steel companies are offering around Rs 1500/MT over list prices and it is expected that there would be correction of around Rs 3000/MT by the end of this month.


(Devang) #649

When you say above list price what does that mean is that discount ?


(adeepsandhu) #650

I mean to say List Price -Rs 1500 are current rates and prices are expected to correct by total Rs 3000/MT by end of this month.


#651

Steel prices see seasonal downturn during the rainy season while I agree that the fall have been larger this season compared with the last year. This is also because the rise was much sharper over the last 12 months. China steel prices remain strong and no threat to India steel prices as of now. In fact I consider Russian/CIS steel prices a bigger threat to Indian steel prices but nothing serious so far.


#652

Chinese Yuan vs Indian Rupee

  • INR weakened against Yuan by 14% over past 1 year (bottom May 18)
  • Exports (metals, chemical, yarn) to witness upside
  • Imports (electrical equipment, fertiliser, antibiotics, chemical) to see downside
    @twitter

(Devang) #653

Hi but china is increasing their production and its in news that from this year onwards their will be mill to mill restrictions according to pollution level and not a blanket one. The prices domestically are 25% approx down from high since in winter the demand is less. If china’s prod increases what will the impact on india ?


(adeepsandhu) #654

I would personally stay out of Steel manufacturing sector because it is my observation that:

  1. Demand for steel is slowing down domestically.

  2. Since elections are approaching it is normal for infra projects to slow down.

  3. Due to sanctions imposed by Mr Trump there is lot of steel from China, Russia, South Korea etc aggressively looking for new markets.

  4. Indian government is also protecting domestic steel manufacturers by imposing extra import duty but on the contrary it has become very chanllenging for Indian steel manufacturers to export steel to other countries because of counter-duties being imposed by them.

All these factors will contribute in correction of steel prices and in turn be boon for the end customer.

Disclosure: Our group is using around 12000 MT steel every month sourced through various steel manufacturers.


(manivannan.g) #655

South-west monsoon made good progress in KA, TN. All the southern state dams are at fullest capacity. Paddy, sugar cane, cotton, rubber, coffee will witness a rise in production (unless there’s no floods in north-east monsoon). Positive for fertilizers, textile and rubber + agri automobile; negative for sugar, rice, coffee cos. Sugar sector woes will be prolonged.


(Krishnendu) #656

hi Jiten,

Any idea on Cement industry ? I guess they are in the upcycle now.


(Raj A A) #658

Iron ore prices surge:Any further rise would impact Steel margin: Industry

http://epaper.business-standard.com/bsepaper/svww_zoomart.php?Artname=MjAxODA3MjdhXzAxMzEwMTAwNw==&ileft=575&itop=937&zoomRatio=163&AN=MjAxODA3MjdhXzAxMzEwMTAwNw==


(Raj A A) #659

Global steel output jumps in H1
http://epaper.business-standard.com/bsepaper/svww_zoomart.php?Artname=MjAxODA3MjdhXzAxMzEwMTAwOA==&ileft=573&itop=1264&zoomRatio=162&AN=MjAxODA3MjdhXzAxMzEwMTAwOA==


(Sharad Thorat) #660

Hello friends.

Found good blogs to track latest developments in ferrochrome industry in China and all over the world. I found it very helpful to understand basics behind price change of iron ore.
Hope you would love it.

https://www.unichrome.ch/news


(SOHAN) #661

Hello friends.in cyclical investing does management and balance sheet matters?


(learning) #662

It matter in all investment - cyclicals, secular, special sits etc.

For cyclical e.g if balance sheet is not good than even a good management can’t take much advantage e.g. Tata steel
If managment is not good then cyclical may not see good return e.g. KMB and his focus on growth instead of quality of earning in aluminium etc.


(SOHAN) #663

Is anyone tracking ferroalloys.promoter holding is good.balancsheet is also good.stock at all time low.pe of 1 price to book of .30 .price to sales0.20.is there any problem related to management?or cyclical low price?


(Jiten Parmar) #664

Hi friends,

Some developments on my side. Our firm is now a SEBI-Registered Investment Advisory firm. Will be constrained on talking of any buy/sell/hold on any stocks. Will try to contribute (time permitting) on sectors, and to an extent on companies, without giving any advice.