JSW Steel, NALCO, Tata Steel: Metal stocks dazzled this week, Nifty Metal index jumps over 10.6% in 5 sessions; key factors to know

On Thursday, May 15, the Nifty Metal index popped 1.74% to 9,210.05 levels.

The Nifty Metal index is designed to reflect the behavior and performance of the metals sector, including mining, in India. Currently, the index has 15 constituents. Some prominent names include JSW Steel, Tata Steel, National Aluminium Company Limited (NALCO), Adani Enterprises, Hindustan Zinc, and Vedanta.

A host of factors, such as improving macroeconomic conditions and demand trends, could be attributed to a sharp rally in metal stocks.

US-China trade deal

Analysts opine that a US-China trade agreement to sharply lower reciprocal tariffs for 90 days that emerged on Monday, May 12, boosts the outlook for trade and the economy. Last week, after their talks in Geneva, the US agreed to cut tariffs on Chinese goods to 30% from 145% announced earlier, while China announced that it would lower its tariffs on US goods to 10% from 125%. This move has allayed fears of a prolonged trade war, which had previously dampened global demand for metals.

Q4 results and commentary

Companies such as Tata Steel reported a healthy set of earnings for the quarter ended March 31, 2025 (Q4 FY25). The steel major posted over twofold increase YoY in consolidated net profit to ₹1,200.88 crore for the quarter under review, on account of higher income.

The company's total income rose to ₹56,679.11 crore from ₹58,863.22 crore seen in the year-ago quarter.

Similarly, metals and mining conglomerate Vedanta Ltd, too, reported a net profit of ₹3,483 crore for the January-March quarter (Q4 FY25), marking an increase of 154% from ₹1,369 crore registered in the same period last year.

Billionaire Anil Agarwal-backed company’s revenue from operations rose 14% annually to ₹40,455 crore from ₹35,509 crore logged in the year-ago period.

The company reported stable operational performance as its operating profit, also known as earnings before interest, taxes, depreciation, and amortisation (EBITDA), jumped 31% to ₹ 11,466 crore as against ₹ 8,768 crore.

Its EBITDA margin improved by 370 basis points to 28.34% from 24.69% reported in the same period last year.

Both companies indicated a healthy outlook for their businesses.

Tata Steel said it has earmarked a capital expenditure of ₹15,000 crore for its operations in India, the UK, and the Netherlands in the current financial year. Out of this, ₹11,000 crore is planned for domestic operations, the company's CEO & MD, T V Narendran, and Executive Director and Chief Financial Officer, Koushik Chatterjee, said.

This indicates the growth prospects in the domestic market.

Optimism around industrial metals

Last month (April 2025), Vedanta Group Chairman Anil Agarwal said young Indian entrepreneurs and investors have a "great opportunity" in the copper sector, calling it the "new super metal" that will power the future of technology and infrastructure.

In a post on social media platform X, Agarwal said, “The world's second largest gold producer, Barrick Gold, is rebranding to just Barrick. That is because it sees its future in copper.”

“Copper is the new super metal which is being heavily used in every advanced technology, whether EVs, renewable energy infrastructure, AI, or defence equipment,” he said.

Aluminium

Another industrial metal, aluminium, too, has been on a rising spree. Analysts said fresh positions created by traders amid demand from consuming industries supported aluminium prices in the futures market.

Reports suggest Guinea is considering cancelling Emirates Global Aluminium’s mining licence. EGA exported 10.8 million tonnes of bauxite in 2024, supporting nearly 3.5 mt of alumina production capacity.

This potential disruption has raised fears of a near-term alumina shortage, prompting pre-buying and speculative positioning.

As a result, alumina prices have surged over 10% from April lows, the report adds.

Apart from these, factors such as easing inflation and rate cut expectations, too, aid metal companies. In India, retail inflation declined to a nearly 6-year low of 3.16% in April, mainly on account of subdued prices of vegetables, fruits, pulses, and other protein-rich items, and remains within the comfort zone of the Reserve Bank.

The Consumer Price Index (CPI) based inflation was 3.34% in March and 4.83% in April 2024. It was 3.15% in July 2019.

US inflation also remained modest. These trends have increased expectations of interest rate cuts by central banks, which would lower borrowing costs for companies and stimulate economic activity, thereby increasing demand for metals.

Another reason why metal stocks, especially steel stocks ,have surged is the imposition of a safeguard duty on certain steel products.

On April 21, 2025, the government imposed a 12% provisional safeguard duty for 200 days on five steel product categories, including hot rolled coils, sheets, and plates, to protect domestic players froma surge in imports.

"...the Central Government after considering the said findings of the Director General (Trade Remedies), hereby imposes...a provisional safeguard duty at the rate of twelve per cent ad valorem," according to a notification of the Department of Revenue.

It said that the safeguard duty imposed under this notification shall be effective for a period of 200 days (unless revoked, superseded or amended earlier) from the date of publication of this notification.

Last year in December, the Directorate General of Trade Remedies (DGTR) started the investigation into the sudden surge in imports of 'Non-Alloy and Alloy Steel Flat Products', used in various industries, including fabrication, pipe making, construction, capital goods, auto, tractors, bicycles, and electrical panels.

The investigations were conducted following a complaint from the Indian Steel Association on behalf of its members including ArcelorMittal Nippon Steel India; AMNS Khopoli; JSW Steel; JSW Steel Coated Products; Bhushan Power & Steel; Jindal Steel and Power; and Steel Authority of India Limited.

How shares have performed

Further, NALCO has jumped over 17% during the past five sessions. Hindalco, too, has gained 7%.