Domestic Base Metal Cos to Thrive in FY'25: ICRA

New Delhi, Oct 29 (PTI) Robust prices and resilient domestic demand will drive the performance of domestic base metal companies in the ongoing financial year, rating agency ICRA said on Tuesday.

Base metals are non-ferrous industrial metals including copper, aluminium, lead, nickel, tin and zinc.

According to ICRA's latest research, "international base metal prices rose by 12-14 per cent in 7M FY2025 compared to the same period last year".

While potential downside risks in the second half of FY'25 cannot be ruled out, low inventories and ongoing supply constraints are likely to limit any sharp price corrections during this period.

Additionally, the stimulus announced by the Chinese government along with interest rate cuts in the US are supporting metal prices, the rating agency said in a statement.

In the domestic market, while the coal costs remain stable, the rising alumina costs, due to supply constraints, pose a near-term concern for the non-integrated aluminium players.

ICRA said that it projects the buoyant metal prices to support the operating margins for domestic non-ferrous metal companies in FY25. The domestic demand for base metals registered an expansion of 10-13 per cent during FY23 and FY24, led by increased consumption from end-user sectors, particularly infrastructure, electrical, and renewable energy.

Demand for non-ferrous metals is likely to show a growth of 7-10 per cent in FY25, surpassing the global demand growth forecast of two per cent by a wide margin.