Tata Steel To Nalco: Nifty Metal Stocks Recover After China Cuts Tax Rebate For Aluminium, Copper Products

Metal stocks including Tata Steel Ltd. and National Aluminium Co. rose on Monday as Nifty Metal recovered from its six-session fall, tracking latest development in China on tax rebate of aluminium and copper products.

This comes as China's Ministry of Finance has announced the scrapping of export tax rebates on aluminium and copper products, leading to the biggest surge in aluminium prices in over a year.

The decision will be effective from Dec. 1, 2024, and could reduce Chinese aluminium exports, potentially tightening global supply and increasing prices.

This is a positive development for Indian aluminium players like Hindalco Industries Ltd., Vedanta Ltd., and National Aluminium Co. While Hindalco and Vedanta could benefit from increased global demand and potentially higher prices, Nalco is likely to benefit from increased domestic demand for aluminium and potential export opportunities.

However, higher prices can translate to a rise in costs for aluminium-consuming industries like auto, construction, and packaging.

On Monday, Nifty Metal outperformed its other sectoral peers with most of its stocks rising. Shares of National Aluminum Co. rose the most among the index constituents and recorded an intraday gain of over 9%. This was followed by Vedanta and Hindalco Industries, which were up around 4%.

Stocks in the sector which are a part of the Nifty index supported the index by 11 points at 11:06 a.m. when the Nifty was 156 points down.

Raashi Chopra, director of India equity research at Citi, told NDTV Profit she has a neutral to bullish view on aluminum and has held a negative view on the steel space.

In the non-ferrous space, she has a 'buy' call on Vedanta, but she also noted that it is hard to figure out what can change the game for steel in China and it therefore is getting difficult to hold positive view on steel focused equities.