How much more steam does the metals rally have? .
If you look at the LME, the entire pack seems to be on fire. You have to be selective here. So one is catching the commodity cycle right and in this world of easy money with central banks expanding the balance sheet to probably $13 trillion in next one and a half years, commodity will be in a bit of an uptrend. But you have to avoid leveraged balance sheets and ensure that you do not get carried away.
Tata Steel still looks good. If you see their last quarter numbers, there’s about 5.2 million tonnes Indian output, and another 2.1-2.2 million tonnes on the European side. The margins will improve. There have been three-four price hikes. Even in Europe, the hybrid realisation should improve. Already the spot spreads are above $200 per tonne. You will see both operating and financial leverage playing out. They have already done almost a billion dollar debt reduction so that will play out.