Shares of India’s copper and aluminium makers such as National Aluminium Company (NALCO), Hindalco Industries, and Vedanta surged by up to 7% in early morning trade on Monday, November 18, driven by a sharp rise in aluminium prices over the weekend.
The price increase came after China’s finance ministry last week proposed to reduce or cancel export tax rebates for commodities including copper and aluminium, effective December 1.
NALCO led the charge, with its stock climbing 7.42% to ₹236.20, while Hindalco Industries jumped 4.6% to ₹656, and Vedanta followed closely, rising 4% to ₹449.50.
China’s decision to cancel this tax rebate, which has long supported its export-driven aluminium industry, sparked a sharp rally in aluminium prices on the London Metal Exchange on Friday. The move is expected to curb the excessive supply of Chinese aluminium abroad, a factor that has historically triggered trade disputes with the US and Europe.
These disputes often centre on excess global supply, low prices, and the closure of smelters due to high energy costs. Aluminium and copper, key materials for industries like manufacturing, construction, and automotive, are expected to see higher global prices.
Importers such as the United States, Japan, and South Korea may face increased costs following the removal of China’s export tax rebate. In addition to aluminium and copper, China’s finance ministry announced that the export tax rebate for certain refined oil products, photovoltaic products, batteries, and some non-metallic mineral products would be reduced from 13% to 9%.
Industrial metals, long weighed down by bearish trends, saw a glimmer of renewed interest over the weekend. Apart from the tax rebate announcement, the revival was also driven by strong retail sales figures in China, signalling that consumption growth is finally catching up with factory output.
Until now, China’s recovery had been uneven, with production outpacing sluggish consumer sentiment-a dynamic that appears to be shifting. However, despite the weekend rebound, industrial metals ended last week in the red, marking their seventh straight weekly decline.
A surging US dollar, boosted by Donald Trump’s victory, continued to dampen sentiment by making dollar-priced commodities less appealing to global investors. The tug-of-war between improving fundamentals and currency-driven headwinds keeps the market on edge.
Recent weeks see decline in metal stocks
Metal stocks have been under pressure in recent weeks, weighed down by the surging US dollar following Donald Trump’s victory, which has fueled volatility in commodity prices. Adding to the concerns, Trump’s proposed steep tariff hikes on Chinese goods-key consumers of base metals-have raised alarms among investors, stoking fears of potential disruptions to China’s economic recovery.
These worries come at a time when China is implementing significant policy measures to stimulate growth, making any impact on its economy a global concern. The metal sector’s weak performance in Q2 has further rattled investor confidence, keeping the pressure firmly on the metal pack.
