Over the last year, the BSE Metals Index which comprises of companies such as NMDC, Tata Steel, SAIL, Hindalco and others has lost 35 per cent against 11 per cent loss posted by the bellwether BSE Sensex.

What has hurt the twelve index constituents? The prices of key metals such as steel, aluminium, copper, zinc and manganese are down between 10 and 40 per cent. Steel and aluminium producers have also not been able to hike prices enough in order to fully pass through the higher cost of coal, the key input. The growth in steel consumption in 2011 was well below market expectations.

Capacity additions have also been lacklustre as land acquisition and receiving regulatory clearances remained major hindrances. For example, JSW Steel was hit by the Karnataka mining ban which has dramatically lowered iron ore supply while raising prices. Almost every company on the list faces regulatory trouble of some sort.

Stocks of miners have been battered by markets as worries over additional new levies and tougher norms for bagging mines remain overhangs. Coal India and NMDC continue to sell coal and iron ore at levels far below international prices as part of domestic policy. They have struggled to ramp up output as new mines additions remain hard to come by.

Half of the twelve companies in the index saw profits slip during the nine months ended December 2011. The sales growth for the twelve companies (excluding Hindalco's sizable Novelis subsidiary) came in at 20 per cent. Profit growth came at half those levels. Excluding Coal India's profits, the other eleven saw total profits shrink four per cent. Coal was the only commodity whose price rose during the period under consideration.