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Our outlook for metal stocks under coverage remains cautious to negative for CY21. We rate all metal stocks at either hold /reduce /sell. The current margins, valuations clearly tell a story of caution.
Chinese demand stimuli, artificial raw material shortages through restrictions on scrap imports (helping all the commodities – iron ore and aluminium in particular) sustain the rally for now.
Deleveraging, as a theme, is important but overhyped given such cyclically high margins, valuations.
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