The shares of National Aluminium Company (NALCO) dipped the highest, falling by 6% to an intraday low of Rs 162.40, followed by Vedanta shares, which fell by 5.7% to Rs 414.35 in early trade and Hindalco shares falling by 5.4% to Rs 617.15.
Further, the shares of Tata Steel and Hindustan Zinc fell by nearly 5.5% each.
Yes Securities’ executive director Amar Ambani, in a report quoted by the Times of India, explained that the unchanged 25% US tariff on steel and aluminium will increase US domestic prices.
“However, exporters from Vietnam, Japan, and South Korea are pivoting to India and the Middle East,” Ambani added.
As a result, India is facing a surge in cheap steel imports, which puts pressure on local steel producers who struggle to compete with the lower prices. This situation is exacerbating the challenges already faced by India’s steel industry, potentially affecting margins, pricing power, and production volumes.A note from global brokerage firm Jefferies, focusing on the metals sector (steel and aluminium), especially in relation to Hindalco Industries and the impact of the US market on Indian metal exports, stated that the US business of Novelis, a major aluminium producer and a subsidiary of Hindalco, contributes 13-15% of Hindalco’s consolidated EBITDA.Also read: IOC, BPCL and other OMC stocks rally up to 4% as crude prices fall after OPEC+ output hike
Some of Novelis’ products move across the U.S. and Canada, which may be relevant if there are trade or tariff developments.
However, the note also stated that the impact of U.S. policies or tariffs on Indian steel exports is limited, as the US accounts for just 4% of India’s total steel exports.
Additionally, Digant Haria of GreenEdge Wealth, in an interaction with ET Now, also expressed a bullish view on the metals sector, stating that among all export-heavy sectors, metals remain a top pick. While he acknowledges that the sector may face some initial impact, he is confident that it will “find a way out” and continue to perform well.
He also highlights that metals and mining remain a top exporting sector and one to consider buying on dips.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)
