Valuations: Global companiesPrice P/B (x)
CY14 CY15 CY13
MiningBHP AUD 35.79 6.3 5.9 2.2FMG AUD 3.94 4.2 4.5 1.5Rio Tinto AUD 61.89 6.2 5.7 2.0Vale USD 25.24 5.0 4.8 0.9Teck Res . USD 21.35 7.8 6.4 0.7STEEL A. Mitta l EUR 11.055 6.1 5.2 0.5Posco k KRW 361 5.6 5.2 0.7US Steel USD 39.92 5.9 5.2 1.5Nucor USD 54.96 10.7 8.1 2.2JFE JPY 2151.5 7.8 6.8 0.7Gerdau BRL 12.36 7.0 6.3 1.1Bao Steel CNY 4.48 6.1 5.5 0.8NON FERROUSAlcoa USD 16.72 10.0 7.9 1.7Hydro NOK 38.3 10.3 7.8 1.1Rusa l HKD 4.76 15.7 12.3 1.4Note: Detailed on pg 23 Source: Bloomberg
EV/EBITDA (x)
BSE Metals Index v/s Sensex
979899
100101102
15-S
ep
16-S
ep
17-S
ep
18-S
ep
19-S
ep
BSE Metal Sensex
Source: Bloomberg Note: Indexed to 100 on 15 Sep 2014 Stock performance table on pg 24
Investors are advised to refer through disclosures made at the end of the Research Report.
Steel prices ski jumping off steepened Chinese slope Indian long product (Mumbai TMT) prices declined 1% WoW. Although
scrap prices corrected sharply by 2.3% WoW, sponge iron prices were broadly flat. Indian HRC prices were slightly lower as import prices from China declined another USD5/t WoW.
Iron ore prices after gaining mid-week – touching USD85/t – closed the week slightly lower than USD82/t. Coking coal recovered USD2/t closing at USD110/t. Chinese steel prices were down 4 to 6% WoW. This doesn’t augur well for Indian import prices.
EU HRC prices were up by EURO5-10/t over the last two weeks helped by depreciation of currency against USD, while scrap prices declined USD16/t WoW. The spreads for EU mills continue to expand.
LME Aluminum slipped below USD2,000/t, down 3% WoW, with some support from slightly higher cash premiums. Alumina continued to gain strength higher another USD5/t, closing at USD340/t
Copper and Zinc at LME were largely unchanged however Lead declined 2% WoW following the 4% decline the previous week.
Spot copper TCRC is at its 10 month high on increasing supplies (resumption of Indonesia exports).
Sanjay Jain ([email protected]); +91 22 3982 5412/ Dhruv Muchhal ([email protected])
STEE
L M
ETA
LLIC
S A
LUM
. ZI
NC
COPP
ER
OTH
ERS
MIS
C.
Valuations: Indian companiesCompany Price P/B (x)
(INR) FY15E FY16E FY14SteelTata Steel 510 6.4 6.2 2.0SAIL 75 7.7 6.6 0.7JSW Steel 1288 6.6 6.4 1.3JSPL 211 7.5 6.7 0.9NMDC 174 5.7 5.5 2.3Non-FerrousHindalco 164 8.0 6.9 1.4SSLT 284 6.9 6.3 1.2HZL 167 5.6 4.4 1.6Nalco 68 6.4 5.2 1.4Note: Detailed table on pg 23 Source: MOSL
EV/EBITDA (x)
Metals Weekly
22 September 2014
Metal PricesCMP
19-Sep % 12-Sep % 1-Jul % 1-Jan
TMT- Mumbai (INR/ton) 34,900 -1 35,300 -3 35,900 -4 36,300HRC- Mumbai (INR/ton) 34,645 -1 35,054 -5 36,617 -12 39,377HRC (USD/ton) fob CIS 540 0 542 0 538 1 533
Sponge i ron - Ra ipur (INR/ton) 21,550 0 21,600 -1 21,750 6 20,300Pig i ron - Ra ipur (INR/ton) 24,300 -2 24,700 -8 26,550 -3 25,000Iron ore spot (USD/ton) cfr China 82 0 82 -14 95 -39 135Coking coal (USD/ton) fob Aus . 111 2 108 0 111 -16 132Shred. scrap (USD/ton) Rotterdam 352 -4 368 -6 374 -7 378
LME Spot (USD/ton) 1,949 -3 2,008 6 1,837 11 1,753Indian prices (INR ‘000/ton) 119 -3 122 7 110 9 109LME inventories (‘000 ton) 4,672 -1 4,701 -8 5,066 -15 5,468
LME Spot (USD/ton) 2,250 -1 2,270 3 2,194 6 2,116Indian prices (INR ‘000/ton) 137 -1 138 4 132 6 129LME inventories (‘000 ton) 753 0 754 13 667 -16 894
LME Spot (USD/ton) 6,868 0 6,856 -2 7,015 -7 7,375Indian prices (INR ‘000/ton) 416 0 417 -1 422 -10 463LME inventories (‘000 ton) 154 -1 156 -2 157 -58 371
Gold (INR/10gms) 26,518 -2 26,975 -6 28,149 -10 29,312Sl iver (INR/1kg) 40,176 -2 40,858 -10 44,412 -9 43,938Lead Spot LME (USD/ton) 2,068 -2 2,115 -3 2,129 -8 2,259FC 6-8% C bas is 60% Cr (USD/lb Cr) 1.17 0 1.17 2 1.15 14 1.02
INR/USD 60.9 0 61.0 2 59.9 -2 61.9BDI 1,075 -8 1,173 20 894 -53 2,277
Source: Meta l Bul letin, Bloomberg, Steel Mint, MOSL
Week Quarter YTD CY14
22 September 2014 2
Metals Weekly
Contents
Page No. Ferrous 3-10 India 3 & 4 European Union 5 China 6 Other regions 7 & 8 Steel raw material 9 & 10 Ferro alloys 11 Non-ferrous 12-18 Aluminum 12 Copper 14 Zinc 15 Lead 16 Commodity curve analysis 17 China non-ferrous trade data 18 Key indicators 19-20 Industrial production growth across the globe 21 BSE announcements 22 Metals valuation matrix 23 Metals stock performance 24
22 September 2014 3
Metals Weekly
Ferrous INDIA Indian flat steel prices import parity (INR/T, exl. ED & VAT)
33,000
35,000
37,000
39,000
41,000
43,000
Sep-
13
Oct
-13
Nov
-13
Dec
-13
Jan-
14
Feb-
14
Mar
-14
Apr
-14
May
-14
Jun-
14
Jul-
14
Aug
-14
Sep-
14
HRC Mumbai (INR/t)
Indian long steel price (INR/T, exl. ED & VAT)
32,000
34,000
36,000
38,000
Sep-
13
Oct
-13
Nov
-13
Dec
-13
Jan-
14
Jan-
14
Feb-
14
Mar
-14
Apr
-14
May
-14
Jun-
14
Jun-
14
Jul-
14
Aug
-14
Sep-
14
TMT Mumbai (INR/t)
Steel intermediates prices (INR/T, exl. ED & VAT)
19,000
20,000
21,000
22,000
23,000
24,000
Sep-
13
Oct
-13
Nov
-13
Dec
-13
Jan-
14
Feb-
14
Mar
-14
Apr
-14
May
-14
Jun-
14
Jul-
14
Aug
-14
Sep-
14
Sponge (Raipur)
India: Monthly crude steel production
-5.0
0.0
5.0
10.0
15.0
6.25
6.50
6.75
7.00
7.25
Sep-
12
Nov
-12
Jan -
13
Mar
-13
May
-13
Jul-
13
Sep-
13
Nov
-13
Jan-
14
Mar
- 14
May
-14
Jul-
14
YoY
(%)
(m to
ns)
India YoY (%)
Source: SteelMint, WSA, MOSL
India HRC import prices declined further, down
USD5/t WoW to now USD515/t.
TMT (Mumbai) prices remain under pressure on lower China import prices
and were down for the second consecutive week
now. WoW prices contracted by 1.1%.
Sponge iron continues to look sluggish on both lack
of demand and China long product pricing pressure.
Ferrous
Steel demand remains sluggish having grown by
just 0.7% YTD July. Aug flash print indicates YTD
growth at 0.3% (Apr- Aug).
22 September 2014 4
Metals Weekly
Ferrous
INDIA
Scrap Mandi (INR/t)
22,000
23,000
24,000
25,000
26,000
27,000
28,000
Sep-
13
Oct
-13
Nov
-13
Dec
-13
Jan-
14
Feb-
14
Mar
-14
Apr
-14
May
-14
Jun-
14
Jul -
14
Aug
-14
Scrap (Mandi)
Iron ore lumps (INR/t)
4,000
5,000
6,000
7,000
8,000
9,000
Sep-
12
Nov
-12
Jan-
13
Mar
-13
May
-13
Jul-
13
Sep-
13
Nov
-13
Jan-
14
Mar
-14
May
-14
Jul-
14
Sep-
14
NMDC 6-40mm (CG) Lumps 5-18 (Odisha)
Iron ore fines (INR/t) ex mine
1,400
1,800
2,200
2,600
3,000
3,400
Sep-
12
Nov
-12
Feb-
13
May
-13
Jul-
13
Oct
-13
Jan-
14
Mar
-14
Jun-
14
Sep-
14
Fines 63% (Odisha) NMDC Fines
Pellet (Barbil) INR/t
6,000
6,500
7,000
7,500
8,000
8,500
9,000
Dec
-13
Jan-
14
Jan-
14
Feb-
14
Mar
-14
Apr
-14
May
-14
Jun-
14
Jul-
14
Aug
-14
Sep-
14
Pellet (Barbil)
Source: SteelMint, WSA, MOSL
Ferrous
Pellet prices were flat WoW.
Scrap prices saw sharp correction, down 2.3%
WoW. Since July, scrap is down by about INR3,000/t
as against TMT by INR1,000/t and Sponge iron largely unchanged.
Iron ore prices were unchanged as lower
international prices have made domestic iron ore
uneconomical for some of the steel plants.
Prices of iron ore fines by NMDC are unchanged.
22 September 2014 5
Metals Weekly
European Union European HRC prices (EUR/ton)
375
425
475
525
Sep-
12
Nov
-12
Jan-
13
Mar
-13
May
-13
Jun-
13
Aug
-13
Oct
-13
Dec
-13
Feb-
14
Apr
-14
May
-14
Jul-
14
Sep-
14
North Europe HRC South Europe HRC
Rotterdam: shredded scrap prices (USD/t)
320
350
380
410
Sep-
12
Nov
-12
Jan-
13
Mar
-13
May
-13
Jun-
13
Aug
-13
Oct
-13
Dec
-13
Feb-
14
Apr
-14
May
-14
Jul-
14
Sep-
14
European wire rods southern region (Euro/t)
450
470
490
510
530
550
Sep-
12
Nov
-12
Jan-
13
Mar
-13
May
-13
Jul-
13
Sep-
13
Nov
-13
Jan-
14
Mar
-14
May
-14
Jul-
14
Sep-
14
Spreads ( HRC-1.6xiron ore-0.7xcoking coal) – (USD/t)
180
235
290
345
400
Oct
-10
Dec
-10
Feb-
11
Apr
-11
Jun-
11
Aug
-11
Oct
-11
Dec
-11
Feb-
12
Apr
-12
Jun-
12
Aug
-12
Oct
-12
Dec
-12
Feb-
13
Apr
-13
Jun-
13
Aug
-13
Oct
-13
Dec
-13
Feb-
14
Apr
-14
Jun -
14
Aug
-14
EU China
Source: Metal Bulletin, Bloomberg, WSA, MOSL
HRC prices continued to strengthen with prices up
by EURO5-10/t over last two weeks. Dollar strength
is providing support.
Rotterdam scrap saw a sharp decline, down 4.4%, losing USD16/t WoW. Low
iron ore and dollar strength are the factors, in
our view.
South Europe wire rod prices were unchanged
Europe spreads are close to one year high on weak
across the board raw material prices and
strength in HRC on Euro depreciation.
22 September 2014 6
Metals Weekly
China China domestic prices (USD/ton)
400
500
600
700
800
900
Sep-
08
Jan-
09
May
-09
Sep-
09
Jan-
10
May
-10
Sep-
10
Jan-
11
May
-11
Sep-
11
Jan-
12
May
-12
Sep-
12
Jan-
13
May
-13
Sep-
13
Jan-
14
May
-14
Sep-
14
HRC Rebar
Steel spreads (Steel price – 1.6x iron ore – 0.55x coke) for Chinese producers
140
185
230
275
320
Jun-
10
Sep-
10
Dec
-10
Mar
-11
Jun-
11
Sep-
11
Dec
-11
Mar
-12
Jun-
12
Sep-
12
Dec
-12
Mar
-13
Jun-
13
Sep-
13
Dec
-13
Mar
-14
Jun-
14
Sep-
14
HRC Rebar
Steel trade (m ton)
0
2
4
6
8
Sep-
12
Nov
-12
Jan-
13
Mar
-13
May
-13
Jul-
13
Sep-
13
Nov
-13
Jan-
14
Mar
-14
May
-14
Jul-
14
Exports Imports
Steel inventories in main China cities (m tons)
4
5
6
7
8
9
Dec
-12
Mar
-13
May
-13
Jul-
13
Sep-
13
Dec
-13
Feb-
14
Apr
-14
Jul-
14
Sep-
14
China long/flat prices were down by 4-6% WoW. Since July China prices are down
by 10-12%
However spreads remain healthy on weakening iron
ore/coking coal prices
Given weak domestic market, China continues to look to exports. Exports in
July at 7.5mt, were highest in history, up 14% MoM
Steel inventories are declining on tighter credit
22 September 2014 7
Metals Weekly
Other regions
CIS HRC export prices (USD/ton) fob basis
510
520
530
540
550
Oct
-13
Nov
-13
Dec
-13
Jan-
14
Mar
-14
Apr
-14
May
-14
Jun-
14
Jul-
14
Sep-
14
CIS Exports (HRC)
Turkish export billets (USD/ton)
500
520
540
560
Oct
-13
Nov
-13
Dec
-13
Jan-
14
Feb-
14
Mar
-14
Apr
-14
May
-14
Jun-
14
Jul-
14
Aug
-14
Sep-
14
Turkish Exp Billets
North America HRC prices (USD/ton)
600
625
650
675
700
Oct
-13
Nov
-13
Dec
-13
Jan-
14
Feb-
14
Mar
-14
Apr
-14
May
-14
Jun-
14
Jul-
14
Aug
-14
Sep-
14
CIS: Monthly crude steel production
-10
-5
0
5
10
8.0
8.5
9.0
9.5
10.0
Jun-
12
Sep-
12
Nov
-12
Jan-
13
Mar
-13
May
-13
Jul-
13
Sep-
13
Nov
-13
Jan-
14
Mar
-14
May
-14
Jul-
14
YoY
(%)
(m to
ns)
CIS YoY (%)
Source: Metal Bulletin, WSA, Bloomberg, MOSL
CIS export prices were lower by USD2/t WoW
US HRC was down USD5/t and about USD10/t lower
since beginning Sep. Lower international prices is weighting on US HRC.
CIS countries crude steel production growth was
positive for 3rd consecutive month, rising by 2.1% in
July 2014
Turkey billet exports were lower by USD5/t.
22 September 2014 8
Metals Weekly
Other regions
North America: Monthly crude steel production
-15.0
-7.5
0.0
7.5
15.0
9.0
9.5
10.0
10.5
11.0
Jun-
12
Sep-
12
Nov
-12
Jan-
13
Mar
-13
May
-13
Jul-
13
Sep-
13
Nov
-13
Jan-
14
Mar
-14
May
-14
Jul-
14
YoY
(%)
(m to
ns)
North America YoY (%)
Global: Monthly crude steel production
-2
0
2
4
6
8
120
125
130
135
140
145
Jul-
12
Sep-
12
Nov
-12
Jan-
13
Mar
-13
May
-13
Jul-
13
Sep-
13
Nov
-13
Jan-
14
Mar
-14
May
-14
Jul-
14
YoY
(%)
(m to
ns)
Global YoY (%)
Global: Monthly crude steel capacity utilization
69
72
75
78
81
84
Jul-
12
Sep-
12
Nov
-12
Jan-
13
Mar
- 13
May
-13
Jul-
13
Sep-
13
Nov
-13
Jan-
14
Mar
-14
May
-14
Jul-
14
Capacity Utilization
Source: Bloomberg, WSA, MOSL
After 6 consecutive months of positive production growth
momentum, July was slower at 2.2%
Global crude steel production increased 3% YoY to 137m tons in July
Global capacity utilization declined 300bp MoM /
100bp YoY to 75.4% in July
22 September 2014 9
Metals Weekly
Steel raw materials
Import price of 62% grade iron-ore fines in China (USD/ton)
65
80
95
110
125
140
Sep-
13
Oct
-13
Nov
-13
Dec
-13
Dec
-13
Jan-
14
Feb-
14
Mar
-14
Apr
-14
May
-14
May
-14
Jun-
14
Jul-
14
Aug
-14
Sep-
14
CIF FOB
OTC iron-ore swaps (USD/ton)
80859095100105110115
15-M
ar-1
422
-Mar
-14
29-M
ar-1
45-
Apr
-14
12-A
pr-1
419
-Apr
-14
26-A
pr-1
43-
May
-14
10-M
ay-1
417
-May
- 14
24-M
ay-1
431
-May
-14
7-Ju
n-14
14-J
un-1
421
-Jun
-14
28-J
un-1
45-
Jul-
1412
-Jul
-14
19-J
ul-1
426
-Jul
-14
2-A
ug-1
49-
Aug
-14
16-A
ug-1
423
-Aug
-14
30-A
ug-1
46-
Sep-
1413
-Sep
-14
20-S
ep-1
4
2015 1Q15 4Q14
China iron-ore production and imports (m tons)
44
50
56
62
68
30
60
90
120
150
Sep-
12
Nov
-12
Jan-
13
Mar
-13
May
-13
Jul-
13
Sep-
13
Nov
-13
Jan-
14
Mar
-14
May
-14
Jul-
14
Ore Imports Ore Prod Pig iron prod (RHS)
China iron-ore inventories (mt)
60
70
80
90
100
110
Oct
-12
Dec
-12
Feb-
13
Apr
-13
May
-13
Jul-
13
Sep-
13
Nov
-13
Dec
-13
Feb-
14
Apr
-14
Jun-
14
Jul-
14
Source: Metal Bulletin, Bloomberg, MOSL
After gaining strength mid-week, touching USD85/t, iron ore is down back to
USD82/t.
China iron ore inventories are inching higher. Steel mills inventories too are high, according to media
China iron ore imports increased 11% MoM
Iron ore forward prices too fell along with spot prices
22 September 2014 10
Metals Weekly
Steel raw materials
Freight rates to China (USD/ton)
0
8
16
24
32
Sep-
12
Oct
-12
Nov
-12
Dec
-12
Jan-
13
Feb-
13
Mar
-13
Apr
-13
May
-13
Jun-
13
Jul-
13
Aug
-13
Sep-
13
Oct
-13
Nov
-13
Dec
-13
Jan-
14
Feb -
14
Mar
-14
Apr
-14
May
-14
Jun-
14
Jul-
14
Aug
-14
Brazil Australia India
Coal price index
65
75
85
95
Sep-
12
Nov
-12
Jan-
13
Apr
-13
Jun-
13
Aug
-13
Oct
-13
Dec
-13
Feb-
14
Apr
-14
Jul-
14
Sep-
14
Richards Bay Steam Coal
Coke price index (fob China)
180
230
280
330
380
Aug
-12
Oct
-12
Dec
-12
Feb-
13
Apr
-13
Jun-
13
Aug
-13
Oct
-13
Dec
-13
Feb-
14
Apr
-14
Jun-
14
Aug
-14
USD
/t
China coke export spot (LHS)
Coking coal (USD/t)
100
120
140
160
180
Nov
-12
Jan-
13
Mar
-13
May
-13
Jul-
13
Sep-
13
Nov
-13
Jan-
14
Mar
-14
May
-14
Jul-
14
Sep-
14
Spot coking coal (fob Australia)
Coking coal recovered slightly to USD110/t vs. previous week close of
USD108/t
Thermal coal declined further USD1/t now
trading at USD67.9/t. Since July thermal coal is down
by about USD5/t
Bulk sea freights were slightly lower WoW.
22 September 2014 11
Metals Weekly
Ferro alloys
China’s imports of manganese ore and concentrate
130
160
190
220
250
280
500
800
1,100
1,400
1,700
2,000
Oct
-12
Dec
-12
Feb-
13
Apr
-13
Jun-
13
Aug
-13
Oct
-13
Dec
-13
Feb-
14
Apr
-14
Jun-
14
Aug
-14
USD
/t
'000
tons
Imports Prices (RHS)
Chrome ore FOB spot prices
140
160
180
200
Oct
-12
Nov
-12
Dec
-12
Jan-
13
Feb-
13
Mar
-13
May
-13
Jun-
13
Jul-
13
Aug
-13
Sep-
13
Oct
-13
Nov
-13
Jan-
14
Feb-
14
Mar
-14
Apr
-14
May
-14
Jun-
14
Aug
-14
Sep-
14
USD
/ton
40% Chrome Africa
Ferro chrome CIF prices (CNY/t)
5,500
7,000
8,500
10,000
11,500
Oct
-12
Dec
-12
Feb-
13
Apr
-13
Jun-
13
Aug
-13
Oct
-13
Dec
-13
Feb-
14
Apr
-14
Jun-
14
Aug
-14
Fe Chrome 50% Cr China Fe Chrome 63% Cr Pittursburgh
Silico Manganese prices
0.4
0.5
0.6
0.7
Feb-
13
Apr
-13
Jun-
13
Aug
-13
Oct
-13
Dec
-13
Feb-
14
Apr
-14
Jun-
14
Aug
-14
USD
/lb
Silico Manganese in warehouses in Pittsburg USA
Source: Metal Bulletin, Bloomberg, MOSL
22 September 2014 12
Metals Weekly
Non-ferrous
Aluminum LME inventories and spot prices
4.6
4.9
5.2
5.5
1,600
1,800
2,000
2,200
Sep-
13
Oct
-13
Nov
-13
Dec
-13
Jan-
14
Feb-
14
Mar
-14
Apr
-14
May
-14
Jun-
14
Jul-
14
Aug
-14
Sep-
14
m to
nsUSD
/t
Inventories (RHS) Spot
Global primary aluminum monthly production and YoY growth
-2.0
0.5
3.0
5.5
8.0
3,600
3,800
4,000
4,200
4,400
Jul-
12
Sep-
12
Nov
-12
Jan-
13
Mar
-13
May
-13
Jul-
13
Sep-
13
Nov
-13
Jan-
14
Mar
-14
May
-14
Jul-
14
YoY
grow
th (
%)
'000
tons
Production YoY
Aluminum: SHFE Vs LME arbitrage (USD/T)
-100
0
100
200
300
Nov
-12
Jan-
13
Mar
-13
May
-13
Jul-
13
Sep-
13
Nov
-13
Jan-
14
Mar
-14
May
-14
Jul-
14
Sep-
14
India: Company-wise primary aluminum monthly production
43
44
41
45
46
49
49
44
50
34
35
33
34
33
32
33
33
35
35
32
36
34
35
33
35
21
21
21
21
20
21
21
19
21
20
21
21
21
21
21
21
21
22
22
20
22
23
26
25
28
35
35
32
33
33
34
33
31 34
32
28
24
25
25
24
26
26
27
27
24 27
26
27
26
28
45
45
44
45
44
46
46
40 46
44
45
45
45
45
45
46
45
46
46
42 46
45
46
45
46
Jul-
12
Sep-
12
Nov
-12
Jan-
13
Mar
-13
May
-13
Jul-
13
Sep-
13
Nov
-13
Jan-
14
Mar
-14
May
-14
Jul-
14
'000
tons
Hindalco Balco Nalco SSLT
Non-ferrous
LME slipped below USD2,000/t, down 3% WoW, to now
USD1,950/t.
Global metal production growth has been
moderating with July growth at 1.2% YoY vs
June 2.2%
22 September 2014 13
Metals Weekly
Non-ferrous
Aluminum Aluminum raw material and power cost for marginal producer in USA (USD/t)
0
800
1,600
2,400
3,200
Oct
-09
Dec
-09
Mar
-10
May
-10
Aug
-10
Oct
-10
Jan-
11
Mar
-11
Jun-
11
Aug
-11
Nov
-11
Jan -
12
Apr
-12
Jun-
12
Aug
-12
Nov
-12
Jan-
13
Apr
-13
Jun-
13
Sep-
13
Nov
-13
Feb-
14
Apr
-14
Jul-
14
Sep-
14
CPC Alumina Power LME+Spot
CPC US (USD/t)
200
300
400
500
600
Jun-
09
Sep-
09
Dec
-09
Mar
-10
Jun-
10
Sep-
10
Dec
-10
Mar
-11
Jun-
11
Sep-
11
Dec
-11
Mar
-12
Jun-
12
Sep-
12
Dec
-12
Mar
-13
Jun-
13
Sep-
13
Dec
-13
Mar
-14
Jun-
14
Sep-
14
Alumina (USD/t)
160
240
320
400
480
Jun-
09
Oct
-09
Jan-
10
May
-10
Sep-
10
Jan-
11
Apr
-11
Aug
-11
Dec
-11
Apr
-12
Jul-
12
Nov
-12
Mar
-13
Jun-
13
Oct
-13
Feb-
14
Jun-
14
Sep-
14
Industrial power US (Lousiana) (USc/kwh)
4.0
5.0
6.0
7.0
8.0
9.0
Jun-
09
Oct
-09
Jan-
10
May
-10
Sep-
10
Jan-
11
Apr
-11
Aug
-11
Dec
-11
Apr
-12
Jul-
12
Nov
-12
Mar
-13
Jun-
13
Oct
-13
Feb-
14
Jun-
14
Sep-
14
Source: Metal Bulletin, Bloomberg, Industry, MOSL
Aluminum product spreads remain attractive
Alumina was higher another USD5/t WoW
trading at USD340/t
22 September 2014 14
Metals Weekly
Non-ferrous
Copper LME inventories and prices
0.1
0.2
0.3
0.4
0.5
0.6
0.7
6,000
6,250
6,500
6,750
7,000
7,250
7,500
Sep-
13
Oct
-13
Nov
-13
Dec
-13
Jan-
14
Feb-
14
Mar
-14
Apr
-14
May
-14
Jun-
14
Jul-
14
Aug
-14
Sep-
14
m to
ns
USD
/t
Inventories (RHS) Spot
Global refined copper monthly production and YoY growth
-2.5
0.0
2.5
5.0
7.5
10.0
1.4
1.5
1.6
1.7
1.8
1.9
2.0
Aug
-12
Oct
-12
Dec
-12
Feb-
13
Apr
-13
Jun-
13
Aug
-13
Oct
-13
Dec
-13
Feb-
14
Apr
-14
Jun-
14
YoY
grow
th (
%)
m to
ns
Production YoY - RHS
China: Refined copper monthly production and YoY growth
-8
3
14
25
36
0.30
0.37
0.44
0.51
0.58
0.65
0.72
Sep-
12
Nov
-12
Jan-
13
Mar
-13
May
-13
Jul-
13
Sep-
13
Nov
-13
Jan-
14
Mar
-14
May
-14
Jul-
14
YoY
grow
th (
%)
m to
ns
Production YoY - RHS
Copper: Spot TCRC (USc/lb)
22.0
24.0
26.0
28.0
30.0
32.0
34.0
Sep-
13
Oct
-13
Nov
-13
Dec
-13
Dec
-13
Jan-
14
Feb-
14
Feb-
14
Mar
-14
Apr
-14
Apr
-14
May
-14
Jun-
14
Jun-
14
Jul-
14
Aug
-14
Sep-
14
LME was largely unchanged. Inventories
were also flat WoW.
July production growth picked pace higher by 7.4%
YoY vs. 5.7% increase in June
Spot TCRC rose to 10 month high on increasing
supplies following the resumption of exports
from Indonesia while demand remains largely
unchanged.
22 September 2014 15
Metals Weekly
Non-ferrous
Zinc LME inventories and prices
0.6
0.8
0.9
1.1
1.2
1,800
2,000
2,200
2,400
2,600
Sep-
13
Oct
-13
Nov
-13
Dec
-13
Jan-
14
Feb -
14
Mar
-14
Apr
-14
May
-14
Jun-
14
Jul-
14
Aug
-14
Sep-
14
m to
ns
USD
/t
Inventories (RHS) Spot
Global refined zinc monthly production and YoY growth
-10.0
-4.0
2.0
8.0
14.0
0.9
1.0
1.1
1.1
1.2
Aug
-12
Sep-
12O
ct-1
2N
ov-1
2D
ec-1
2Ja
n-13
Feb-
13M
ar-1
3A
pr-1
3M
ay-1
3Ju
n-13
Jul-
13A
ug-1
3Se
p -13
Oct
-13
Nov
-13
Dec
-13
Jan-
14Fe
b-14
Mar
-14
Apr
-14
May
-14
Jun-
14Ju
l-14
YoY
grow
th (
%)
m to
ns
Production YoY growth (RHS)
China: Refined zinc monthly production and YoY growth
-22
-2
19
40
0.3
0.4
0.4
0.5
Sep-
12
Nov
-12
Jan-
13
Mar
-13
May
-13
Jul-
13
Sep-
13
Nov
-13
Jan-
14
Mar
-14
May
-14
Jul-
14
YoY
grow
th (
%)
m to
ns
Production YoY growth (RHS)
Zinc: Global metal surplus/(deficit) - kt
-150
-100
-50
0
50
100
150
Aug
-12
Sep-
12
Oct
-12
Nov
-12
Dec
-12
Jan -
13
Feb-
13
Mar
-13
Apr
-13
May
-13
Jun-
13
Jul-
13
Aug
-13
Sep-
13
Oct
-13
Nov
-13
Dec
-13
Jan-
14
Feb-
14
Mar
-14
Apr
-14
May
-14
Jun-
14<--d
efic
it
(k
t)
sur
plus
-->
After sharp decline last week, LME was broadly
flat.
July Zinc production growth came at 3.1% YoY,
slightly slower than 3.8% growth recorded in June.
Zinc market remains a deficit since March 14.
Deficit in May increased to 93kt declining to 29kt in
June.
22 September 2014 16
Metals Weekly
Non-ferrous
Lead LME inventories and prices
0.15
0.18
0.20
0.23
0.25
1,900
2,000
2,100
2,200
2,300
Sep-
13
Oct
-13
Nov
-13
Dec
-13
Jan-
14
Feb-
14
Mar
-14
Apr
-14
May
-14
Jun-
14
Jul-
14
Aug
-14
Sep-
14
m to
ns
USD
/t
Inventories (RHS) Spot
Global refined lead monthly production and YoY growth
-15
-5
5
15
25
0.6
0.7
0.8
0.9
1.0
Aug
-12
Nov
-12
Jan-
13
Mar
-13
May
-13
Jul-
13
Sep-
13
Nov
-13
Jan-
14
Mar
-14
May
-14
Jul-
14
YoY
grow
th (
%)
m to
ns
Production YoY - RHS
China: Refined lead monthly production and YoY growth
-40
-20
0
20
40
0.2
0.3
0.4
0.5
Aug
-12
Sep-
12O
ct-1
2N
ov-1
2D
ec-1
2Ja
n-13
Feb-
13M
ar-1
3A
pr-1
3M
ay-1
3Ju
n-13
Jul-
13A
ug-1
3Se
p-13
Oct
-13
Nov
-13
Dec
-13
Jan-
14Fe
b-14
Mar
-14
Apr
-14
May
-14
Jun-
14Ju
l-14
YoY
grow
th (
%)
m to
ns
Production YoY - RHS
:
India: Company-wise refined lead monthly production
6 9
11 11 10 9 9 12 12
10 12 12 11 9 9 6 7
12 11 11 14
10 10 11 11
Jul-
12
Aug
-12
Sep-
12
Oct
-12
Nov
-12
Dec
-12
Jan-
13
Feb-
13
Mar
-13
Apr
-13
May
-13
Jun-
13
Jul-
13
Aug
-13
Sep-
13
Oct
-13
Nov
-13
Dec
-13
Jan-
14
Feb-
14
Mar
-14
Apr
-14
May
-14
Jun-
14
Jul-
14
HZL
Source: Metal Bulletin, Bloomberg, MOSL
Following the 4% decline previous week, Lead
continued to slide down further 2% during the
week.
In July production declined by 2.4% YoY. This follows
2.1% YoY growth posted in June.
22 September 2014 17
Metals Weekly
Commodity forward curves LME aluminum (USD/ton)
1,800
2,000
2,200
2,400
11/2
014
3/20
15
7/20
15
11/2
015
3/20
16
7/20
16
11/2
016
3/20
17
7/20
17
11/2
017
3/20
18
7/20
18
11/2
018
3/20
19
7/20
19
11/2
019
Current 1-week ago 3-month ago
LME copper (USD/ton)
6,600
6,700
6,800
6,900
7,000
7,100
7,200
11/2
014
3/20
15
7/20
15
11/2
015
3/20
16
7/20
16
11/2
016
3/20
17
7/20
17
11/2
017
3/20
18
7/20
18
11/2
018
3/20
19
7/20
19
11/2
019
Current 1-week ago 3-month ago
LME zinc futures (USD/ton)
2,000 2,050 2,100 2,150 2,200 2,250 2,300 2,350
11/2
014
3/20
15
7/20
15
11/2
015
3/20
16
7/20
16
11/2
016
3/20
17
7/20
17
11/2
017
3/20
18
7/20
18
11/2
018
3/20
19
7/20
19
11/2
019
Current 1-week ago 3-month ago
Base metals US spot premium (USD/ton)
40
115
190
265
340
415
490
Dec
-07
Apr
-08
Aug
-08
Dec
-08
Apr
-09
Aug
-09
Dec
-09
Apr
-10
Aug
-10
Dec
-10
Apr
-11
Aug
-11
Dec
-11
Apr
-12
Aug
-12
Dec
-12
Apr
-13
Aug
-13
Dec
-13
Apr
-14
Aug
-14
Aluminium Zinc Copper
Source: Metal Bulletin, Bloomberg, MOSL
22 September 2014 18
Metals Weekly
China non-ferrous trade data
China’s aluminum trade ('000 tons)
0
100
200
300
400
Jul-
12
Oct
-12
Dec
-12
Feb-
13
Apr
-13
Jun-
13
Aug
-13
Oct
-13
Dec
-13
Feb-
14
Apr
-14
Jun-
14
Aug
-14
Imports Exports
China’s refined copper trade ('000 tons)
0
100
200
300
400
500
Jul-
12
Sep-
12
Nov
-12
Jan-
13
Mar
- 13
May
-13
Jul-
13
Sep-
13
Nov
-13
Jan-
14
Mar
-14
May
-14
Jul-
14
Imports Exports
China’s refined zinc trade ('000 tons)
0
25
50
75
100
Sep-
12
Dec
-12
Feb-
13
Apr
-13
Jun-
13
Aug
-13
Oct
-13
Dec
-13
Feb-
14
Apr
-14
Jun-
14
Aug
-14
Export Import
China’s alumina imports ('000 tons) and prices (USD/ton)
0
200
400
600
800
Sep-
12
Dec
-12
Feb-
13
Apr
-13
Jun-
13
Aug
-13
Oct
-13
Dec
-13
Feb-
14
Apr
-14
Jun-
14
Aug
-14
Source: Metal Bulletin, Bloomberg, MOSL
Unwrought aluminum exports were higher by
10kt MoM to 390kt
China alumina imports were flat WoW
22 September 2014 19
Metals Weekly
Key indicators China new loan growth (Yuan b)
300
600
900
1,200
1,500
Jun-
12
Aug
-12
Oct
-12
Dec
-12
Feb-
13
Apr
-13
Jun-
13
Aug
-13
Oct
-13
Dec
-13
Feb-
14
Apr
-14
Jun-
14
China: PMI
38
44
50
56
62
46
48
50
52
54
Sep-
12
Nov
-12
Jan-
13
Mar
-13
May
-13
Jul-
13
Sep-
13
Nov
-13
Jan-
14
Mar
-14
May
-14
Jul-
14
Stee
l PM
I
Mfg
PM
I
Mfg PMI Steel PMI
China: Fixed asset investment growth (%)
16
18
20
22
Aug
-12
Oct
-12
Dec
-12
Feb-
13
Apr
-13
Jun-
13
Aug
-13
Oct
-13
Dec
-13
Feb-
14
Apr
-14
Jun-
14
Aug
-14
Currency movement with respect to the rupee
65
74
83
92
101
110
51
55
59
63
67
71
Sep-
13
Oct
-13
Nov
-13
Dec
-13
Jan-
14
Mar
-14
Apr
-14
May
-14
Jun-
14
Jul-
14
Aug
-14
Sep-
14
INR
INR
USD (LHS) GBP EURO
Source: Bloomberg, MOSL
Fixed asset investment growth has slowed to 17%
over the last few months
China steel PMI remained in contracted mode for the
4th consecutive month. Aug print came at 48.4
22 September 2014 20
Metals Weekly
Key indicators (Contd...) China Energy Production Electricity (b kwh)
-10
0
10
20
30
40
50
200 250 300 350 400 450 500 550
May
-11
Jul-
11
Sep-
11
Nov
-11
Jan-
12
Mar
-12
May
-12
Jul-
12
Sep-
12
Nov
-12
Jan-
13
Mar
-13
May
-13
Jul-
13
Sep-
13
Nov
-13
Jan-
14
Mar
-14
May
-14
Jul-
14
Electricity YoY (%, RHS)
China Monthly Trade YoY (%)
-20
0
20
40
Sep-
12
Dec
-12
Mar
-13
May
-13
Jul-
13
Oct
-13
Dec
-13
Mar
-14
May
-14
Aug
-14
Import Export
China Price Index YoY (%)
-6
-3
0
3
6
Sep-
12
Nov
-12
Dec
-12
Feb-
13
Mar
-13
May
-13
Jun-
13
Aug
-13
Sep-
13
Nov
-13
Dec
-13
Feb-
14
Mar
-14
May
-14
Jun-
14
Aug
-14
PPI CPI
China GDP YoY (%)
7.2
7.6
8.0
8.4
8.8
9.2
9.6
Sep-
11
Dec
-11
Mar
-12
Jun-
12
Sep-
12
Dec
-12
Mar
-13
Jun-
13
Sep-
13
Dec
-13
Mar
-14
Jun-
14
Source: Bloomberg, MOSL
China’s GDP growth was 7.5% in 2QCY14
China electricity production growth
decelerated to 3.4% YoY in Aug from 18.7% growth
recorded in July.
22 September 2014 21
Metals Weekly
Industrial production growth The UK and the USA (%)
-6
-3
0
3
6
Sep-
12
Nov
-12
Jan-
13
Mar
-13
May
-13
Jul-
13
Sep-
13
Nov
-13
Jan-
14
Mar
-14
May
-14
Jul-
14
UK USA
Japan (%)
-20
-10
0
10
20
Sep-
12
Dec
-12
Feb-
13
Apr
-13
Jun-
13
Aug
-13
Oct
-13
Dec
-13
Feb-
14
Apr
-14
Jun-
14
Aug
-14
European Union (%)
-16
-10
-4
2
8
Aug
-12
Oct
-12
Dec
-12
Feb-
13
Apr
-13
Jun-
13
Aug
-13
Oct
-13
Dec
-13
Feb-
14
Apr
-14
Jun-
14
Aug
-14
France Germany Italy
BRIC (%)
-7
0
7
14
Aug
-12
Oct
-12
Dec
-12
Feb-
13
Apr
-13
Jun-
13
Aug
-13
Oct
-13
Dec
-13
Feb-
14
Apr
-14
Jun-
14
Aug
-14
Russia Brazil India China
Source: Bloomberg, MOSL
China’s industrial production decelerated
sharply by 210bps MoM to 6.9%
22 September 2014 22
Metals Weekly
Stock exchange announcements JSW Steel: JSW Steel clarified that it has submitted a binding bid for the take-
over of the rolling mills of Piombini Plant of Lucchini in Italy. The acquisition is in line with its long term strategy to acquire finishing mills near to the market, the company mentioned.
Hindalco: The company said 6 of its bauxite mines in Jharkhand were ordered to
stop operating by the state government, in compliance with the amendment to the MMDR Act which does away with the second deemed extension provision. The company further mentioned that it had applied for the license renewals as per the requirement of the law and the application is under consideration of the state government. It expects renewals to be granted within six months and has sufficient inventory to maintain production for the period. The mines closed supplied to its refineries in Muri and Renukoot. The company also mentioned that the other operating mines in the area could also supply bauxite to the two refineries.
22 September 2014 23
Metals Weekly
Price(INR) FY14E FY15E FY16E FY15E FY16E FY15E FY16E FY14E FY15E
SteelTata Steel Buy 510 8,133 35.5 39.5 49.0 12.9 10.4 6.4 6.2 2.0 1.5SAIL Neutra l 75 4,130 4.6 7.5 8.1 9.9 9.2 7.7 6.6 0.7 0.7JSW Steel Buy 1288 5,111 34.4 139.7 137.8 9.2 9.3 6.6 6.4 1.3 1.1JSPL Buy 211 3,169 20.9 23.6 30.6 8.9 6.9 7.5 6.7 0.9 0.8NMDC Buy 174 11,325 16.1 18.2 18.6 9.6 9.4 5.7 5.5 2.3 2.1
Non-FerrousHindalco Buy 164 5,559 12.5 13.3 15.0 12.4 10.9 8.0 6.9 1.4 1.3SSLT Buy 284 13,822 17.2 23.5 24.1 12.0 11.8 6.9 6.3 1.2 1.1Hindustan Zinc Buy 167 11,583 16.3 17.9 18.1 9.3 9.2 5.6 4.4 1.6 1.4Nalco Buy 68 2,877 2.6 5.1 5.6 13.5 12.1 6.4 5.2 1.4 1.3
Valuations: Indian Companies
CMP=current market price Source: MOSL
P/B(x)Rating
MCAP (USD M)
EPS P/E (x) EV/EBITDA (x)
Valuations: Global CompaniesCompany BBG P/BV (x)
CODE CUR YR NXT YR CUR YR NXT YR CY13MiningBHP-Bi l l i ton BHP AU AUD 36 167,403 12.7 13.2 6.3 5.9 2.2FMG FMG AU AUD 4 11,207 4.1 6.4 4.2 4.5 1.5Rio Tinto RIO AU AUD 62 97,883 10.6 10.1 6.2 5.7 2.0Vale Vale US USD 25 61,345 6.7 6.6 5.0 4.8 0.9Teck Resources TCK US USD 21 12,321 27.2 15.7 7.8 6.4 0.7STEEL Arcelor Mitta l MT NA EUR 11 23,870 19.5 12.9 6.1 5.2 0.5Posco 005490 KS k KRW 361 29,892 18.2 14.2 5.6 5.2 0.7US Steel X US USD 40 5,793 19.5 14.5 5.9 5.2 1.5Nucor NUE US USD 55 17,524 26.8 16.6 10.7 8.1 2.2JFE 5411 JT JPY 2,152 12,331 11.9 10.3 7.8 6.8 0.7Gerdau GGBR4 BZ BRL 12 8,592 16.2 13.1 7.0 6.3 1.1Bao Steel 600019 CH CNY 4 12,004 10.3 9.0 6.1 5.5 0.8NON FERROUSAlcoa AA US USD 17 19,668 26.8 19.3 10.0 7.9 1.7Norsk Hydro NHY NO NOK 38 12,450 35.6 18.6 10.3 7.8 1.1Rusa l 486 HK HKD 5 9,193 17.3 10.3 15.7 12.3 1.4
Source: Bloomberg
EV/EBITDA(x)Currency PRICE
MCAP (US$ M)
PE (x)
Metals Valuation Matrix
22 September 2014 24
Metals Weekly
Metals stock performance on absolute and relative basis (%)
Months 1 3 6 12 1 3 6 12SteelTata Steel -6.2 -1.7 43.3 64.4 -8.7 -9.2 19.2 33.2SAIL -14.4 -21.3 32.0 46.6 -16.9 -28.8 8.0 15.4JSW Steel 0.2 4.5 32.5 78.2 -2.3 -3.0 8.4 46.9JSPL -28.7 -33.6 -20.3 -18.9 -31.2 -41.1 -44.3 -50.1NMDC -1.5 -1.5 32.7 42.1 -4.1 -9.0 8.6 10.9Non-FerrousSSLT -4.4 -3.9 61.2 52.8 -7.0 -11.4 37.1 21.6Hindustan Zinc -1.3 4.2 37.9 28.4 -3.9 -3.3 13.8 -2.8Nalco 16.5 21.6 95.8 106.5 14.0 14.1 71.7 75.3Hindalco -9.2 -1.8 37.0 38.7 -11.7 -9.3 12.9 7.5Mid CapsMonnet Ispat -22.8 -23.9 63.3 -21.7 -25.4 -31.4 39.2 -52.9Godawari -1.0 16.7 120.5 104.9 -3.5 9.2 96.4 73.7Sarda Energy -31.6 6.2 146.4 182.8 -34.1 -1.3 122.3 151.6Tata Sponge 16.2 57.1 108.8 263.1 13.7 49.6 84.7 231.9Adhunik Meta l iks -10.0 -16.3 6.8 51.1 -12.6 -23.8 -17.2 19.9Bhushan Steel -13.8 -69.1 -72.5 -74.5 -16.4 -76.6 -96.6 -105.8Ja i Ba la ji -28.1 -25.0 68.3 4.4 -30.6 -32.4 44.2 -26.8Rain Industries 29.2 28.9 63.0 44.6 26.6 21.4 39.0 13.4Prakash Industries -15.6 -31.5 80.5 104.9 -18.1 -39.0 56.4 73.7SENSEX 2.5 7.5 24.1 31.2 - - - -
Absolute Perf (%) Relative Perf to Sensex (%)
Global Metals stock performance on absolute basis (%)
1week 1month 3 months 6 months 7 months 12 months MiningRio Tinto -0.8 -6.9 3.2 1.1 1.2 1.2BHP Bi l l i ton -0.9 -10.6 -2.6 -1.1 -3.3 -3.3Vale -2.4 -13.5 -6.7 -5.1 -27.4 -27.4FMG -4.6 -18.6 -10.9 -24.6 -17.9 -17.9Anglo American -0.7 -6.7 1.4 6.0 -10.0 -10.0Vedanta -5.5 -1.2 -10.2 22.5 -13.9 -13.9SteelUS Steel 13.2 20.0 77.8 76.3 113.5 113.5Nucor 4.9 6.7 11.5 16.3 14.8 14.8Arcelor Mitta l 4.9 8.9 4.3 5.3 6.8 6.8Bao Steel -1.6 -2.2 12.5 22.2 1.6 1.6Posco -0.8 6.2 22.4 25.0 8.8 8.8JFE Holdings 5.5 6.0 10.3 19.5 -17.2 -17.2Nippon 2.4 -3.4 -9.0 8.4 -14.2 -14.2Thyssen Krupp 1.3 2.3 1.9 21.2 26.3 26.3Voest Alpine 0.1 6.7 -5.1 5.2 -4.1 -4.1Gerdau 0.6 -5.3 -13.6 -12.2 -29.2 -29.2AluminiumAlcoa -3.1 -1.3 12.1 36.9 92.1 92.1Rusa l -0.4 17.0 25.4 82.3 108.8 108.8Chalco -5.4 -3.5 19.6 26.4 20.5 20.5
Source: MOSL, Bloomberg
Absolute Perf (%)
Metals Stock Performance
Among large-cap companies, Nalco had the strongest
performance over the last one month, while JSPL was the
weakest amid concerns over coal block de-allocation
Among mid-cap companies, Rain Industries has outperformed
and Sarda Energy has underperformed over one month
Among global mining companies, Anglo was the best performer,
while Vedanta was the worst performing stock over one month
Among global steel majors, US Steel was the best performer, while Bao Steel was the worst
performing stock over the last one month
Among the global aluminum, Chalco has been the worst performer over one month
22 September 2014 25
Metals Weekly
N O T E S
22 September 2014 26
Metals Weekly
Disclosures This research report has been prepared by MOSt to provide information about the company(ies) and sector(s), if any, covered in the report and may be distributed by it and/or its affiliated company(ies). This report is for personal information of the select recipient and does not construe to be any investment, legal or taxation advice to you. This research report does not constitute an offer, invitation or inducement to invest in securities or other investments and Motilal Oswal Securities Limited (hereinafter referred as MOSt) is not soliciting any action based upon it. This report is not for public distribution and has been furnished to you solely for your general information and should not be reproduced or redistributed to any other person in any form. This report does not constitute a personal recommendation or take into account the particular investment objectives, financial situations, or needs of individual clients. Before acting on any advice or recommendation in this material, investors should consider whether it is suitable for their particular circumstances and, if necessary, seek professional advice. The price and value of the investments referred to in this material and the income from them may go down as well as up, and investors may realize losses on any investments. Past performance is not a guide for future performance, future returns are not guaranteed and a loss of original capital may occur.
MOSt and its affiliates are a full-service, integrated investment banking, investment management, brokerage and financing group. We and our affiliates have investment banking and other business relationships with a significant percentage of the companies covered by our Research Department Our research professionals provide important input into our investment banking and other business selection processes. Investors should assume that MOSt and/or its affiliates are seeking or will seek investment banking or other business from the company or companies that are the subject of this material and that the research professionals who were involved in preparing this material may participate in the solicitation of such business. The research professionals responsible for the preparation of this document may interact with trading desk personnel, sales personnel and other parties for the purpose of gathering, applying and interpreting market information. Our research professionals are paid in part based on the profitability of MOSt which include earnings from investment banking and other business. MOSt generally prohibits its analysts, persons reporting to analysts, and members of their households from maintaining a financial interest in the securities or derivatives of any companies that the analysts cover. Additionally, MOSt generally prohibits its analysts and persons reporting to analysts from serving as an officer, director, or advisory board member of any companies that the analysts cover. Our salespeople, traders, and other professionals or affiliates may provide oral or written market commentary or trading strategies to our clients that reflect opinions that are contrary to the opinions expressed herein, and our proprietary trading and investing businesses may make investment decisions that are inconsistent with the recommendations expressed herein. In reviewing these materials, you should be aware that any or all o the foregoing, among other things, may give rise to real or potential conflicts of interest . MOSt and its affiliated company(ies), their directors and employees may; (a) from time to time, have a long or short position in, and buy or sell the securities of the company(ies) mentioned herein or (b) be engaged in any other transaction involving such securities and earn brokerage or other compensation or act as a market maker in the financial instruments of the company(ies) discussed herein or act as an advisor or lender/borrower to such company(ies) or may have any other potential conflict of interests with respect to any recommendation and other related information and opinions.
Unauthorized disclosure, use, dissemination or copying (either whole or partial) of this information, is prohibited. The person accessing this information specifically agrees to exempt MOSt or any of its affiliates or employees from, any and all responsibility/liability arising from such misuse and agrees not to hold MOSt or any of its affiliates or employees responsible for any such misuse and further agrees to hold MOSt or any of its affiliates or employees free and harmless from all losses, costs, damages, expenses that may be suffered by the person accessing this information due to any errors and delays. The information contained herein is based on publicly available data or other sources believed to be reliable. Any statements contained in this report attributed to a third party represent MOSt’s interpretation of the data, information and/or opinions provided by that third party either publicly or through a subscription service, and such use and interpretation have not been reviewed by the third party. This Report is not intended to be a complete statement or summary of the securities, markets or developments referred to in the document. While we would endeavor to update the information herein on reasonable basis, MOSt and/or its affiliates are under no obligation to update the information. Also there may be regulatory, compliance, or other reasons that may prevent MOSt and/or its affiliates from doing so. MOSt or any of its affiliates or employees shall not be in any way responsible and liable for any loss or damage that may arise to any person from any inadvertent error in the information contained in this report. MOSt or any of its affiliates or employees do not provide, at any time, any express or implied warranty of any kind, regarding any matter pertaining to this report, including without limitation the implied warranties of merchantability, fitness for a particular purpose, and non-infringement. The recipients of this report should rely on their own investigations.
Recipients who are not institutional investors should seek advice of their independent financial advisor prior to taking any investment decision based on this report or for any necessary explanation of its contents.
MOSt and/or its affiliates and/or employees may have interests/positions, financial or otherwise in the securities mentioned in this report. To enhance transparency, MOSt has incorporated a Disclosure of Interest Statement in this document. This should, however, not be treated as endorsement of the views expressed in the report.
Disclosure of Interest Statement Companies where there is interest Analyst ownership of the stock Sesa Sterlite
Analyst Certification The views expressed in this research report accurately reflect the personal views of the analyst(s) about the subject securities or issues, and no part of the compensation of the research analyst(s) was, is, or will be directly or indirectly related to the specific recommendations and views expressed by research analyst(s) in this report. The research analysts, strategists, or research associates principally responsible for preparation of MOSt research receive compensation based upon various factors, including quality of research, investor client feedback, stock picking, competitive factors and firm revenues.
Regional Disclosures (outside India) This report is not directed or intended for distribution to or use by any person or entity resident in a state, country or any jurisdiction, where such distribution, publication, availability or use would be contrary to law, regulation or which would subject MOSt & its group companies to registration or licensing requirements within such jurisdictions.
For U.K. This report is intended for distribution only to persons having professional experience in matters relating to investments as described in Article 19 of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (referred to as "investment professionals"). This document must not be acted on or relied on by persons who are not investment professionals. Any investment or investment activity to which this document relates is only available to investment professionals and will be engaged in only with such persons.
For U.S. Motilal Oswal Securities Limited (MOSL) is not a registered broker - dealer under the U.S. Securities Exchange Act of 1934, as amended (the"1934 act") and under applicable state laws in the United States. In addition MOSL is not a registered investment adviser under the U.S. Investment Advisers Act of 1940, as amended (the "Advisers Act" and together with the 1934 Act, the "Acts), and under applicable state laws in the United States. Accordingly, in the absence of specific exemption under the Acts, any brokerage and investment services provided by MOSL, including the products and services described herein are not available to or intended for U.S. persons.
This report is intended for distribution only to "Major Institutional Investors" as defined by Rule 15a-6(b)(4) of the Exchange Act and interpretations thereof by SEC (henceforth referred to as "major institutional investors"). This document must not be acted on or relied on by persons who are not major institutional investors. Any investment or investment activity to which this document relates is only available to major institutional investors and will be engaged in only with major institutional investors. In reliance on the exemption from registration provided by Rule 15a-6 of the U.S. Securities Exchange Act of 1934, as amended (the "Exchange Act") and interpretations thereof by the U.S. Securities and Exchange Commission ("SEC") in order to conduct business with Institutional Investors based in the U.S., MOSL has entered into a chaperoning agreement with a U.S. registered broker-dealer, Motilal Oswal Securities International Private Limited. ("MOSIPL"). Any business interaction pursuant to this report will have to be executed within the provisions of this chaperoning agreement.
The Research Analysts contributing to the report may not be registered /qualified as research analyst with FINRA. Such research analyst may not be associated persons of the U.S. registered broker-dealer, MOSIPL, and therefore, may not be subject to NASD rule 2711 and NYSE Rule 472 restrictions on communication with a subject company, public appearances and trading securities held by a research analyst account.
For Singapore Motilal Oswal Capital Markets Singapore Pte Limited is acting as an exempt financial advisor under section 23(1)(f) of the Financial Advisers Act(FAA) read with regulation 17(1)(d) of the Financial Advisors Regulations and is a subsidiary of Motilal Oswal Securities Limited in India. This research is distributed in Singapore by Motilal Oswal Capital Markets Singapore Pte Limited and it is only directed in Singapore to accredited investors, as defined in the Financial Advisers Regulations and the Securities and Futures Act (Chapter 289), as amended from time to time. In respect of any matter arising from or in connection with the research you could contact the following representatives of Motilal Oswal Capital Markets Singapore Pte Limited: Anosh Koppikar Kadambari Balachandran Email:[email protected] Email : [email protected] Contact(+65)68189232 Contact: (+65) 68189233 / 65249115 Office Address:21 (Suite 31),16 Collyer Quay,Singapore 04931
Motilal Oswal Securities Ltd
Motilal Oswal Tower, Level 9, Sayani Road, Prabhadevi, Mumbai 400 025 Phone: +91 22 3982 5500 E-mail: [email protected]