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Metals’ recovery may not sustain as demand drivers stay subdued

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Metal stocks are staging a minor recovery after undershooting the broader markets in the past year, with the Nifty Metal index inching up 5.2% against the Nifty 50’s 3.8% gains on Tuesday.

However, demand drivers are expected to remain subdued while operating metrics weaken. End-user industries, such as construction, packaging material and automobile makers, have suspended operations and, as a result, demand has nosedived.

Operations in the first quarter of FY21 are expected to be badly hit. “We expect all major steel, non-ferrous plants to be shut/operate at significantly reduced levels of utilization in the next 7-10 days and expect Q1FY21 to be a record-low quarter in terms of both top-line and EBITDA/PAT on the back of exceptionally

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