Metals stocks were on the rise on Tuesday amid improving demand outlook, expectations of price hikes, and China-led supply cuts. JSW Steel hit a fresh 52-week high of ₹1,148, while Tata Steel too touched a new 52-week peak at ₹173.81.
Hindustan Copper also sparkled, climbing nearly 4% to ₹312. Other names in the sector joined the rally — Jindal Steel and Adani Enterprises gained over 2%, while Jindal Stainless advanced 1.6%. The buying momentum pushed the Nifty Metal index higher by 1.3%.
Why metals stocks are gaining?
Analysts at Nomura see steel prices rising up to 5% above current spot levels in the second half of FY26. The optimism stems from seasonal demand recovery, structural changes, tighter supply, and hopes of Chinese stimulus.
1. HRC discounts point to price hikes
Hot-rolled coil is trading at an 8% discount to China parity and 3% below Free Trade Agreement parity. Nomura forecasts that prices could firm up in the coming months.
2. Demand tailwinds are blowing in favour
In China, October typically marks the start of a seasonal demand rebound. In India, a restocking cycle is expected to lift demand significantly.
3. Structural shifts in play
In India, safeguard duties have been extended for three years and GST cuts on key categories could spur consumption. In China, the move toward “anti-involution” — prioritising quality over quantity — is gaining momentum.
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4. China’s output cuts are turning up the heat
From January–July 2025, China’s crude steel production dropped 2% YoY. Nomura projects a sharper 9% cut for August–December 2025, as Beijing has mandated an annual 5% reduction, roughly 50 mt.
5. Stimulus watch: all eyes on October
Markets are hoping for a property-focused stimulus package from China. The upcoming Fourth Plenary Session in October is a key event on the radar.
6. India’s ferrous market is rock solid
Domestic crude steel production and consumption are growing at a high single-digit pace. Since the safeguard announcement, net imports have plunged by nearly 50%, underlining firm domestic fundamentals.
