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Informist, Friday, Apr. 2, 2026

MUMBAI – Technical analysts are bullish on metal stocks for the near term but volatility in prices cannot be ruled out due to the ongoing war between Iran and the US in West Asia. However, metal companies may benefit from the supply-chain disruption due to the war, as this would limit the imports, favouring steel makers. Analysts expect the demand for steel will remain robust, leading to an uptick in domestic steel prices.  

The intensifying war in West Asia has disrupted key trade routes, resulting in a sharp spike in freight rates and intermittent logistical bottlenecks, consequently increasing cost of steel imports and eroding their competitiveness in the domestic market. "Indian steel producers have benefitted from a reduction in import pressure, enabling them to pass through higher costs and sustain realisations at elevated levels," Emkay Global Financial Services said.

Domestic steel prices have continued to rise, with hot rolled coil steel and rebar prices witnessing incremental price hikes of INR 1,000 per tonne to INR 3,500 per tonne since the start of the conflict. In 2026, this translates into a 16% rise in hot rolled coil steel prices and 22% uptick in rebar prices, reflecting firm underlying demand and improved pricing power.

"India's self-sufficiency in iron ore and the presence of ~60 days of coking coal inventory across most steelmakers provide a near-term cushion against supply-side disruptions," Emkay said. However, a prolonged escalation in the conflict, leading to delays in normalisation of trade flows, could exert some upward pressure on the cost of imported coking coal, thereby modestly impacting steel spreads, the brokerage said.

The impact is more pronounced for downstream ferrous players, particularly those reliant on gas and liquified petroleum gas for processing, as ongoing volatility in energy costs amid geopolitical tensions continues to weigh on their operations, the brokerage said. Emkay prefers Steel Authority of India and Jindal Steel, as recent hikes in hot rolled coil and rebar prices are likely to drive a relatively stronger Jan-Mar earnings compared to their peers.

While the Nifty 50 has closed lower for the sixth straight week, the metal index ended higher, gaining 3% this week. The metal index ended tad up at 11456.60 points on Friday. Lloyd Metals and Energy, and National Aluminium Co. topped the weekly charts, with 8% gains each. APL Apollo Tubes was the hardest hit, ending the week with losses of 4%.  

"Valuations are currently at a moderate premium, with the Nifty Metal Index trading at a price-to-earnings multiple of 14-16 times, slightly above its historical average of 12–14 times," Bhavya Shah, a technical analyst at StoxBox said. "Investors are largely paying forward for massive capacity expansions and significantly deleveraged balance sheets." 

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

End

Reported by Gopika Balasubramanium

Edited by Tanima Banerjee

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