METLINE

Steel Price Analysis 1st April 2019

Steel Prices Remain Firm On Stimulus Measures in China, Expectations of a Positive Trade Deal
 While some investors worry about a possible recession, commodity prices have remained firm on an
expected U.S.-China trade deal, and signs of stability in Chinese economic data. According to the official
Purchasing Managers' Index (PMI), factory activity in China unexpectedly grew for the first time in four
months in March.
 Renewed economic optimism and rising prices for coking coal and iron ore have led to firming up of steel
prices across the globe, with steel producers expecting the trend to remain in the short term. Capacity
utilisation rates at Chinese steel mills also rose, helping to support prices for its raw materials.
 Base metals prices have recovered significantly since January’s lows after news that the US and China are
inching closer to signing a trade deal. At the same time, concerns over tightening supplies of crude oil have
resulted in oil prices to rise.
 Copper prices have remained range bound, with US$6570/MT acting as an immediate resistance, and
$7255/MT a long term resistance. The immediate resistance has still not broken, despite positive economic
data from China.
 Overall, the positive optimism around the global economy is likely to keep business and investor sentiment
at a good level in the next 3-6 months.
 Will the stimulus measures and positive trade deal help to revive consumer confidence remains to be seen?

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Steel Price Analysis 1st April 2019

Iron Ore Prices Firm Up, On Supply Concerns and Positive Economic Sentiment

Iron Ore Prices, Dalian Commodity Exchange, Iron Ore 62% Futures - May 19 (DCIOK9)

Iron ore futures contracts for May delivery increased by around 5.2%, hitting a hit a seven-week high on the Dalian Commodity Exchange. The
increase followed strong economic data from China and supply concerns after Rio Tinto cut its 2019 forecast for iron ore shipments. Prices have
also been buoyed by production cuts at Vale and BHP, the other two leading global suppliers of iron ore. BHP is expected to generate lower
output of the steelmaking raw material due to disruption and damage caused by cyclone Veronica, while Brazilian miner Vale, the world’s top
iron ore supplier, failed to obtain stability certificates for 13 dams under review following the rupture of another dam in January that killed
hundreds.

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Steel Price Analysis 1st April 2019

Copper Prices Face Immediate Resistance at US$6570/MT, Due to High Inventory Levels

Copper prices have remained range bound, with US$6570/MT acting as an immediate resistance, and $7255/MT a long term resistance. The
immediate resistance has still not broken, despite positive economic data from China. Generally, if positive economic data is supported by a
positive technical indicator (Breaking the Resistance), only then we can be bullish. Here in case of copper the immediate resistance of US$6570
needs to be broken, to foresee further increase in price to US$7250 levels. May be the market is waiting for more positive data on the economic
front from China. One important reason for the restricted rise in copper prices could be higher inventory levels at LME. Copper inventories at
LME-approved warehouses are at 168,525 tonnes, up from 123, 425 on 4th March 2019. The cancelled warrant ration stood, at 15.0%, down
from 78.3% on 4th March 2019. This is a significant change in supply dynamics, with inventories increasing and material designated for delivery
falling sharply lower.

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Steel Price Analysis 1st April 2019

Nickel Prices Remain Supported by Falling Inventory Levels and Supply Concerns Due to Increasing EV Adoption across the Globe

Nickel inventories at LME-approved warehouses are at 182,574 tonnes, the lowest since June 2013, when nickel stocks stood at 184, 010 tonnes
and nickel price was at $14,350/Ton. The average fall in nickel inventory since January 2018 has been around 12000 tons. If going by the past
data, we have 15 months’ to go to see inventories falling to extremely lower levels. Last time, we saw falling inventories was in back in year 2006
and 2007, and prices peaked an average of $52,179/ton in May 2007. There is no doubt that EV adoption is increasing across the globe, and we
will surely see marked rise in nickel prices in coming 2-3 years, with demand exceeding supply. Metal business is all about timing the purchases.
For my friends in the stainless steel industry (service centers, distributors, stainless steel product manufacturers), there have been many ups and
downs in the past year. One could increase the average basic stock level in business, to benefit from the expected rise in nickel prices, which
could be a reality in the next 2 years.

As of now, inventory levels, are at comfortable levels and there is no immediate concern of supply shortage. Cancelled warrants at the LME
stood at 37% as on 1st April 2019, the same level as month of March, but higher than around 28% reported in the month of January this year.

Nickel prices have a strong support of US$10600-10800/ton, and we do not expect prices to fall below this level, unless there is an expected
recession scenario for the global economy. Also, one important risk to global base metal prices is a stronger dollar against the Euro and other
currencies. US and China economy are showing positive signs of economic growth, but Europe is facing contraction in the manufacturing sector
since the past 2 months. A stronger dollar could restrict a rise in base metal and other commodity prices.

Currently, nickel prices are trading above support level of US$12600/ton, and any positive news from US and China regarding trade deal or China
economic growth could lead nickel prices higher to $14500- levels. US$16000/ton, remains the most important resistance level for nickel prices,
and if prices have to cross and remain above this level, there needs to be a marked decline in nickel stocks tracked by the LME.

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Steel Price Analysis 1st April 2019

Overall the global steel price scenario looks positive for the next 3 months, as the actions of the Chinese authorities appear to have stabilized
their economy, for the moment at least. We have had positive economic data from both China and the US, but it has been only for a month. It
remains to be seen, whether Chinese stimulus measures can help manufacturers in China to sustain the impact of production cuts and reduced
exports due to rising global trade protectionism. China is the world’s biggest commodity consumer, and any negative news from the trade deal
or on the economic front will likely have a direct impact on commodity prices.

While, injection of liquidity into the financial system, tax cuts and infrastructure spending, have given some support to the weakening Chinese
economy, we would need more evidence from the consumer side to actually confirm strength in the Chinese economy. One important chart,
which has raised questions in my mind, is the falling vehicle sales in China. Vehicle sales in China declined 13.8% from a year earlier to 1.48
million units in February 2019, following a 16% decline in the previous month. It was the eighth consecutive annual decrease in vehicle sales due
to the economic slowdown. Will the stimulus measures and positive trade deal help to revive consumer confidence remains to be seen?

https://www.steeltubes.co.in/ https://www.metline-pipefittings.in/ Tel: +91-22-67496383 / 67496384

https://www.steelplates.in/ https://www.themetalsfactory.com/ https://steelbars.in/

METLINE

Steel Price Analysis 1st April 2019

About Us
With a collective experience of over 30 years, Metline Industries is a professional pipe fittings manufacturer, stainless steel pipe manufacturer
and one-stop-shop supplier for steel piping system products, including steel plates, steel pipe and tube, forged flange and fittings, butt-welding
pipe fittings, elbow, tee, reducer, stub end, gaskets, fasteners, valves, etc. in India.

Metline specialises in manufacturing welded and seamless pipes, buttweld fittings, flanges and forged fittings, such as carbon/stainless steel
elbows, tees, reducers, caps, pipe bends, dish ends and pipe sleeve as per ASME/ASTM, DIN and other known specifications. These steel pipe
fittings are widely used in nuclear power stations, power plants, shipbuilding, paper manufacturing, pharmaceutical plants, oil refineries,
petrochemical plants, and natural gas pipeline projects. We are always focused on providing high-quality and high performance alloy steel
fittings, carbon steel fittings, and stainless steel pipe fittings solutions for small fabrication projects and large size turnkey projects.

Our increasing list of customers includes domestic and international end user companies, international traders/distributors, as well as pipe
fittings traders and suppliers based in India. Stainless steel elbows and stainless steel bends used in pipeline systems in various industries are
available in a variety of shapes and sizes. Besides, we also can produce other non-standard size 100% X-Ray welded stainless steel pipe fittings as
per technical drawings provided by our customers.

One of our key strengths is to manufacture and supply high quality long radius elbows, double flanged pipes, piggable bends and large diameter
fabricated pipes in stainless steel, carbon steel, alloy steel and nickel alloy grades.

We also run an operate one of the biggest stainless steel, aluminium and nickel alloys service center in India. We have in house slitting, cutting
and machining facilities to offer custom size and custom made products to our customers across the globe. We are one of the leading steel pipe
manufacturers and suppliers, stainless steel pipe manufacturers, pipe fittings manufacturers, flange manufacturers, stainless steel bar suppliers,
steel plate suppliers, stainless steel plate suppliers, seamless pipe manufacturers, erw pipe manufacturers, scrap steel buyers and steel sheet
suppliers in India.

https://www.steeltubes.co.in/ https://www.metline-pipefittings.in/ Tel: +91-22-67496383 / 67496384

https://www.steelplates.in/ https://www.themetalsfactory.com/ https://steelbars.in/