Icra forecasts steady 10% growth in non-ferrous metals demand

Icra report on metals: In a recent statement, credit rating agency Icra projected that domestic demand for non-ferrous metals such as aluminium and copper would likely maintain a growth rate of 10 per cent in fy25. This prediction follows a robust performance, with apparent consumption growth for these metals ranging between 10 per cent and 13 per cent in the first nine months of the current fiscal year.

This growth has been underpinned by the government's emphasis on infrastructure development, coupled with rising demand from the renewables sector and the electric vehicle industry. Despite an anticipated softening of demand over the next two quarters due to a slowdown in government spending around the general elections, Icra remains confident that overall demand growth will remain stable at 10 per cent in both FY24 and FY25.

Icra also anticipates that the operating margins of domestic players in the non-ferrous metals sector will remain steady at 17–17.5 per cent in FY25, similar to the levels estimated for the preceding fiscal year. As a result, the rating agency has maintained a stable outlook for the sector.

Furthermore, Icra highlighted recent market trends, noting that domestic e-auction premiums on coal had eased to 40 per cent in February 2024. Additionally, prices of key inputs such as caustic soda and calcined pet coke have moderated in the current fiscal year. These developments, combined with the projected demand growth, indicate a positive outlook for the non-ferrous metals sector in the coming years.

(with PTI inputs)