Rising demand from essential industries and limited supply growth are likely to support the copper prices in the long-term. As copper prices continue to remain near record high levels, non-ferrous equities like Hindustan Copper, National Aluminium Company Limited, Vedanta Aluminium Metal, Vedanta Limited and Hindustan Zinc are likely to benefit from the situation, according to an Aditya Birla Capital report.
“A combination of limited new mine supply, rising strategic demand, and increasing focus on supply chain security is creating a commodity cycle which is different from the traditional demand-led cycles, in our view ,” read the report.
Copper prices likely to remain elevated
Combination of factors like new demand avenues, limited mine development projects and delayed expansions are likely to push the copper market into a prolonged deficit. These factors are likely to support elevated copper prices.
Stocks to benefit from higher copper prices
“We expect non-ferrous equities to benefit as the cycle broadens in scope, particularly stocks like HCP, NACL, VAML, HZ, VEDL (Not Rated) which have varying degrees of exposure to various industrial metals,” stated the brokerage in its report.
The global metals and mining sector has seen a sharp growth over the past years, and the brokerage believes “that the cycle remains in its early stages.”
In such a scenario companies like National Aluminium Company Limited, Hindustan Copper, Hindustan Zinc and Gujarat Mineral and Development Corporation (GMDC) are building capabilities across rare earths and crucial minerals, stated the brokerage in its report. It also highlighted that non-ferrous players will be the direct beneficiaries and will be supported by strong earnings growth.
NALCO share price trend
NALCO share price closed 2.38% lower at ₹334.15 per share on BSE with a market capitalization of ₹61,371.05 crore on BSE on Thursday, October 1. The stock has delivered 55% return in one year, 49% return in 2 years and 243% return in three years.
Hindustan Copper Limited
Hindustan Copper share price closed 2.28% lower at ₹461.95 per share on BSE with an Mcap of ₹44671.67 crore on BSE on Thursday. The stock has delivered 37% return in one year, 32% return in two years and 184% return in three years.
Vedanta Aluminium Metal Limited
Vedanta Aluminium Metal stock closed 2.46% lower at ₹402.85 per share on BSE on Thursday. The stock has declined 10.87% in three months.
Hindustan Zinc
Hindustan Zinc stock closed 1.49% lower at ₹556.85 per share on BSE on Thursday. The metal stock has delivered 15.7% return in one year, 7% return in two years and 80% return in three years.
Vedanta Limited
Vedanta share price closed 2.70% lower at ₹251.90 per share on Thursday. The metal stock has delivered 50% return in one year, 35% return in two years and 214% return in three years.
