Metal stocks rallied sharply in the afternoon trading on Wednesday with Tata Steel leading the charge with a 5.47 per cent jump to ₹167.06, followed by Jindal Steel & Power (JSPL) up 4.18 per cent at ₹1,015.95 and SAIL climbing 4.09 per cent to ₹128.13. The Nifty Metal index climbed 2.70 per cent to 9,637.90 points.
The surge was primarily driven by a weakening dollar, which typically boosts demand for commodities as international buyers can purchase more units for the same dollar amount. According to Anubhav Sangal, Senior Research Analyst at Bonanza, this development is particularly positive for Indian metal producers as increased demand could lead to improved production for domestic mills and upward EBITDA revisions for FY26.
Market sentiment received additional support from China’s “anti-involution” plan to reduce steel capacity by 50 million tons in CY25, targeting an 8.5 per cent production cut for the remainder of the year. CLSA noted that despite Chinese steel production dropping by 20 million tons over January-July 2025, the country’s steel exports remain at all-time highs, creating a complex supply-demand dynamic.
Both CLSA and Citi have turned optimistic on the sector. CLSA tweaked its FY26-28 EBITDA estimates for metals and mining companies by -4 per cent to +8 per cent to reflect recent price movements and expects market tightening to improve spreads and increase profitability for Indian mills. The brokerage particularly favors JSPL given its strong capacity addition-driven growth outlook and continues to prefer aluminum plays like Hindalco and Vedanta.
Citi echoed similar sentiments, adjusting target prices by -3 per cent to +6 per cent and maintaining a positive stance on the sector as market conditions tighten.
The broader metal index showed strong participation with 14 stocks advancing and only one declining. Tata Steel emerged as the most active by both volume and value, recording trading worth ₹913.37 crores. Other notable gainers included Hindalco (2.65 per cent), Vedanta (1.71 per cent), and National Aluminium (2.84 per cent). The sector’s strong performance reflects growing investor confidence in the structural improvement of metal fundamentals.
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Published on September 3, 2025