MOSL: Morning India (4/July/19): 1. Metals (Expiry of iron ore leases could disrupt domestic supply); 2. EcoScope; 3. Marico; 4. Aurobindo Pharma; 5. Godrej Consumer; 6. Aegis Logistics
MOrning India (4/July/19): 1. Metals (Expiry of iron ore leases could disrupt domestic supply); 2. EcoScope; 3. Marico; 4. Aurobindo Pharma; 5. Godrej Consumer; 6. Aegis Logistics
Today’s top research theme
Metals: Expiry of iron ore leases could disrupt domestic supply
- Iron ore mining activity could see a major disruption in India if the transition after expiry of leases in Mar'20 is not smooth. It could push up iron ore costs for domestic non-integrated steel mills higher by ~INR2,000-3,000/t.
- Further, if it gets accentuated by the current weakness in the steel market, some players may come under financial stress. While there remains a probability of supply side disruption, there is hope that the government will take necessary steps to ensure a trouble-free transition.
- JSP and JSW Steel will be at risk in the near term.
Piping hot news
Amid subdued monsoon, cabinet offers higher MSP relief for farmers
- Buffeted by subdued monsoon rainfall and mounting agrarian distress, the government on Wednesday raised the minimum support price (MSP) for all kharif crops for the 2019-20 sowing season. The increase is also part of the Narendra Modi government’s efforts to meet its promise to double farmers’ incomes by assuring them commodity prices 1.5 times of the production cost. “The monsoon has been delayed this year and it is worrisome for farmers as well as the government. But according to the weather department’s forecast, the situation would improve and the monsoon would be normal," said agriculture minister Narendra Singh Tomar after a cabinet meeting that cleared the proposal.
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