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Informist, Thursday, Jun. 25, 2026

 

MUMBAI – Shares of most metal companies are likely to remain under pressure next week, as the risk premiums on metals continue to unwind, analysts said. Market participants expect the war in West Asia will not resume and the Strait of Hormuz will remain open for transit. This has led to a tapering of the risk premiums built into commodities, pushing metal company stocks, particularly aluminium producers, lower. Additionally, a hawkish tilt by new US Federal Reserve Chair Kevin Warsh has increased bets of higher interest rates globally, which is a positive for the dollar, but negative for precious metal prices.

 

"Investors are now betting on prices of base metals falling further... (they) have seen how quickly crude (oil prices) tumbled, largely because of hopes that supply chain worries will abate, and now, they expect industrial metals (too) will face limited supply disruption," an analyst at a domestic brokerage said. While the long-term pricing outlook for base metals looks strong due to damage sustained at smelting plants in West Asia, in the near term, investors are reversing their bullish calls, he said.   

 

While aluminium prices rose sharply in the last few weeks due to concerns about supply constraints, some analysts now say there is little steam left in the metal's prices. "The aluminium bull-case scenario is being built on the wrong framework," InCred Research Services said. Since aluminium prices on the London Metal Exchange appear vulnerable to a fall of around $800 per tonne, the current valuations of National Aluminium Co., Vedanta Aluminium Metal, and Hindalco Industries appear stretched. At 1624 IST, Aluminium traded at $3,122.50 per tonne on the LME. InCred argued that the deficit chart captures near-term pressure on primary ingot and regional premiums but wrongly treats the primary aluminium deficit as the total aluminium deficit. It ignores secondary aluminium, which uses around 95% less energy than primary smelting and is increasingly the marginal source of supply.

 

China, InCred said, is the best example of this high secondary aluminium sourcing, as its primary aluminium output has risen from 41.6 million tonnes in 2023 to near its 45 million tonnes per annum policy cap this year, making the primary balance look structurally tight. However, this ignores the secondary aluminium pool, InCred said. Around 80% of China's scrap supply is domestic, suggesting the visible primary deficit is being replenished through domestic scrap, imported scrap, and rising recycling capacity. "The Middle East disruption also appears to be a temporary rather than a structural supply shock. As the war-risk premium unwinds, London Metal Exchange aluminium prices should correct despite low inventories and some regional premium tightness," the brokerage said.

 

This week, the Nifty Metal index ended over 4% lower at 12445.65 points. Aluminium players such as Vedanta and National Aluminium Co. were the worst hit, declining 9% and almost 12%, respectively. Silver miner Hindustan Zinc dropped more than 8%. Barring Welspun Corp., all other constituents of the index ended lower this week.

 

"The Nifty Metal index has breached an important price support zone of 12600–12500 (points) on the downside, Vipin Kumaar, assistant vice president at Globe Capital Markets, said. "The current chart structure points toward short-term weakness in prices as long as the index remains below the 12850 level, which could drag it down toward the 12000 mark," he said. The analyst sees the index facing immediate resistance at 12850 points and finding support at 12000 points.  

 

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* Vedanta Aluminium to be excluded from NSE indices from Tue

 

The 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:

 

Company	Price	Week-on-week  change in %	Resistance	Support
Hindalco Industries Ltd.	953.20	(-)5.60	978.80	937.40
Hindustan Copper Ltd.	491.40	(-)3.90	504.30	482.70
Hindustan Zinc Ltd.	518.05	(-)8.10	536.30	507.80
Jindal Steel Ltd.	1,059.50	(-)6.90	1,106.30	1,032.90
JSW Steel Ltd.	1,231.00	(-)4.40	1,245.70	1,216.70
Jindal Stainless Ltd.	695.05	(-)0.20	705.60	683.80
National Aluminium Co. Ltd.	332.15	(-)11.70	346.10	324.50
NMDC Ltd.	84.94	(-)3.90	87.00	83.50
Steel Authority Of India Ltd.	170.79	(-)5.10	173.60	168.10
Tata Steel Ltd.	188.71	(-)5.20	192.30	185.80
Vedanta Ltd.	273.45	(-)9.10	282.20	267.00
Index	Levels
Nifty Metal	12445.65	(-)4.40	12630.10	12336.10
Nifty 50	24056.00	0.20	24341.50	23896.30
Bse Sensex	77100.47	0.40	78109.00	76488.90

 

 

End

 

Reported by Eshitva Prakash

Edited by Saji George Titus

 

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