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Informist, Friday, Apr. 4, 2025

MUMBAI – Shares of metal companies are seen falling next week due to fears of a probable recession triggered by the US tariffs. This could bring down demand for metals and may lead to a fall in prices of metal products. The sector would be among the worst hit if the US economy slips into recession, brokerage Emkay Financial Services said in a report.

"US' 54% tariffs on Chinese metal will pose a threat to Indian metal companies," said Vipin Kumar, assistant vice president of technical and derivatives at Globe Capital market. This will lead to more dumping of cheap imports to India from China, Kumar said. India is already grappling with the problem of imports from China. On Mar. 19, the Directorate General of Trade Remedies had recommended imposing a 12% safeguard duty on imports of steel products to protect the Indian steel industry from a serious impact after a recent jump in imports.

Metal prices fell on Thursday as the announcement of reciprocal tariffs by US President Donald Trump weighed heavily on the market. Analysts expect prices of copper and aluminium to correct around 4-5% in the near term, Informist reported on Thursday.

"If the price volatility exists, then nobody will buy," a research analyst tracking the metal sector at a domestic broking firm said. In the near term, Tata Steel, JSW Steel, Hindalco Industries, and Vedanta will be the worst hit companies in the sector, the analyst said. The overall sentiment is quite bad in the domestic and global market and the analyst advised to let everything cool down first before taking any positions.

Demand slowdown from key end-user industries, weak aluminium prices, and adverse currency movement are few risks, brokerage Elara Securities had said in a report on Wednesday. Elara Securities changed its rating on aluminium company Hindalco Industries to 'accumulate' from 'buy', but kept the target price unchanged at INR 734. If the US imposes 25% tariff on aluminium import for long term, it may lead to a demand slowdown, analysts said.

On Friday, metal stocks were the worst hit in the domestic market. Shares of Tata Steel and Hindalco Industries ended down 8.6% and 8%, respectively, and were the worst hit in the Nifty 50 index. National Aluminium Co. and Vedanta declined 8.7% each and were the worst hit in the Nifty 200 index. Hindustan Copper tanked 9% and was the hardest hit in the Nifty 500 index. 

The Nifty Metal index fell 7.5% this week and ended at 8414.45 points on Friday. The index had declined 1.2% in the previous week. Support for the index in the near term is seen at 8400 points and the resistance is seen at 8950 points, Kumar of Globe Capital Market, said. 

TOP HEADLINES
* Vedanta's Jan-Mar aluminium output up 1% on year, alumina output down 11%
* Copper, aluminium prices may correct 4-5% as US tariffs seen hurting demand
* IPO Alert: Sai Infinium files draft papers for fresh issue of 19.60 mln shrs
* Jindal Steel acquires Allied Strips through its arm for INR 2.18 bln
* Hindustan Copper inks pact with Chilean mining co for cooperation
* Hindustan Zinc Jan-Mar mined metal output rises 4% on yr, wind power up 3%
* IPO Alert: Jain Resource files DRHP with SEBI for up to INR-20-bln papers
* Godawari Power suspends mining work at Chhatisgarh iron ore mine
* Lloyds Metals FY25 direct reduced iron output 308,243 tn, up 18% on year
* JSW Steel wins bid to develop, operate Dugda coal washery in Jharkhand
* IPO Alert: VMS TMT refiles DRHP for fresh issue, OFS of 15 mln shrs each
* Vedanta extends demerger scheme deadline by six months to Sept 30

Following are the resistance and support levels for the sector's key stocks for next week, as per calculations based on their prices on the National Stock Exchange:

End

Reported by Akshita Kumar
Edited by Subhojit Sarkar

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