Non Ferrous Metals Stocks

The non-ferrous metals sector includes those companies involved in the production of aluminium, zinc, copper, lead and other non-ferrous metals. There are two main segments in the non-ferrous metals industry: the primary segment and the secondary section. The participants in the primary category are those who produce metals from their respective ores and are partially present in some downstream/value-added goods. In contrast, a vast number of downstream companies that produce a variety of value-added products make up the secondary segment, which also includes the recycling business that turns scrap metal into metal.

The non-ferrous metals industry has witnessed healthy growth in India. This has been supported by the growing demand from the automotive, construction, electrical, consumer durables, packaging, renewable energy and galvanised steel sectors and well established related industries for access to raw materials.

The boost to the Indian manufacturing sector due to the government’s campaign ‘Make in India’ is likely to provide an impetus to non-ferrous metals consumption. With respect to demand, India has strong potential, given that the country is anticipated to be among the fastest-growing large economies.

The key ingredients for the growth of the non-ferrous industry are strong demand, availability of raw materials, the high entrepreneurial quotient of the country, development of the ancillary industry, technology, etc.

Investing in the non-ferrous metal industry can be rewarding, but it also comes with its own set of risks and considerations. Here are some factors you should consider before investing in non-ferrous metal industry stocks:

• Commodity Prices: Non-ferrous metals, such as copper, aluminium, and nickel, are highly sensitive to commodity prices. Changes in global demand and supply can significantly impact prices. Before investing, analyse historical price trends and understand the factors that influence them.
• Global Economic Conditions: The non-ferrous metal industry is closely tied to global economic conditions. Economic downturns can lead to decreased demand for metals, affecting prices and, ultimately, company profitability.
• Supply and Demand Dynamics: Study the supply and demand dynamics for specific non-ferrous metals. Overcapacity or shortages can affect prices and company performance. Factors such as new mining projects, geopolitical issues, and technological advancements can impact supply.
• Currency Risks: Many non-ferrous metal companies operate globally, and their revenues are often denominated in various currencies. Exchange rate fluctuations can affect the company’s financial performance when translating revenues and costs back into the reporting currency.
• Regulatory Environment: Government regulations can have a significant impact on the non-ferrous metal industry. Environmental regulations, mining permits, and labour laws are among the factors that can affect a company’s operations and profitability.
• Company Financials: Assess the financial health of the companies you’re considering. Look at key financial metrics, such as revenue growth, profit margins, debt levels, and return on equity. A strong balance sheet and consistent profitability are positive indicators.
• Geopolitical Risks: The industry may be affected by geopolitical events, trade tensions, or changes in government policies. Keep an eye on global events that may impact the stability of metal markets.

To invest in sector stocks via Angel One, follow these steps:

• Log in to your Angel One account.
• Click on the search icon and look for your desired non-ferrous metals sector stock.
• Now, place your buy order. Simply click on the ‘Buy’ button, enter your desired quantity, and select the order type.
• To complete your transaction, click on the ‘Buy’ button.

You can track the status of the purchase from the ‘Positions’ section in the ‘Orders’ module. Once the stock is delivered, you can track its gains and losses from your ‘Portfolio.’