There’s Time Before Metal Commodity Prices Bottom Out: Go India Advisors’ Rakesh Arora
Steel and aluminium demand-wise, 2022 can be considered written-off, Arora said.
There will be enough opportunity when metal commodity prices bottom out before beginning their next cycle, according to Go India Advisors’ Rakesh Arora.
But there’s time before that happens, said the managing partner at the investor relations company. “There will be enough signs when commodity prices bottom out. There’s time. It’s not going to rebound in a V-shape tomorrow. Currently, there are no signs of bottoming,” he told BQ Prime’s Niraj Shah in an interview.
Arora also said 2022 is looking like a very lean period as consumers are hesitant to spend. “Add to that the Russia-Ukraine situation, the ongoing energy crisis and the U.S. panicking over inflation, it’s a perfect recipe for demand destruction.”
Steel and aluminium demand-wise, 2022 can be considered written-off, he said. “Maybe in 2023, commodity demand can rebound.”
In a blog post dated June 25, Arora had said commodity stocks are “oversold” and can see some bounce but bottom will be made when commodity prices bottom out and we are still some time away from it”.
“Our guess is that we see commodity prices bottoming out by early 2023. If you’re stuck with some positions, use the bounces and if you are looking to bottom-fish, be prepared for long-term investment.”
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