Metal stocks were among the hardest hit during last week’s sell-off in the Indian stock market, with the Nifty Metal index falling nearly 3%, snapping its two-week winning streak and marking its biggest weekly decline since mid-November, even as the bull run in both precious and base metals continued.
From its record peak of 11,652 touched on January 6, the index is down about 5%.
Six of the 15 constituents closed with heavy losses during the week, led by Jindal Stainless, which tanked 9.7%. It was followed by Welspun Corp, Jindal Steel, Lloyds Metals & Energy, Adani Enterprises, and NMDC, all of which ended the week with losses ranging from 5% to 6.5%.
What led to a sharp pullback in metal prices?
Although the rally in metal prices continued last week, investors appeared to lock in gains in metal stocks as the recent run-up drove valuations to unsustainable levels, keeping the sector out of favour.
In addition, fresh tariff fears triggered by US President Donald Trump’s remarks on Russia, China, and India also weighed on sentiment, as such measures could hurt global growth.
Last week, Trump warned of higher tariffs on Indian exports if India does not halt purchases of Russian oil. A bipartisan US bill proposing tariffs of up to 500% on countries buying Russian oil has received Trump’s backing and awaits congressional approval.
Meanwhile, copper prices on the LME extended their weekly winning streak to a fourth straight week, surging 4.07% to $13,012 per metric ton on renewed bets on a future demand boost.
The metal, widely used in power and construction, hit a record high of $13,387.50 on Tuesday after rising 42% in 2025, its biggest annual gain since 2009. Other base metals also posted gains, with tin up 13%, nickel 5%, aluminium 2%, lead 4%, and zinc 0.5%.
In the precious metals space, both silver and gold prices closed the week with sharp gains, with most of the rally coming during Friday’s session after softer US jobs data strengthened expectations of US Federal Reserve rate cuts.
Spot silver and gold prices ended the week higher by 10% and 4.10%, respectively, while MCX silver and gold finished with stronger gains of 7% and 2.25%, respectively.
Analysts foresee moderation in Q3FY26 results for metal companies
For the December quarter, analysts expect a soft performance from metal companies, citing weak realisations and rising raw material costs, raising concerns on the Street that the pain in metal stocks could continue.
Domestic brokerage firm Axis Direct expects moderation in absolute EBITDA and margins across steel and aluminium companies under its coverage universe in Q3.
For Tata Steel and SAIL, it estimates EBITDA to decline QoQ, mainly due to lower steel price realisations and higher coking coal costs, partly offset by higher sales volumes.
Aluminium companies such as Hindalco and NALCO are also likely to report slightly muted EBITDA QoQ. Hindalco’s performance is expected to be impacted by lower Novelis EBITDA, while NALCO may be affected by lower alumina sales volumes and prices.
However, strong aluminium prices and lower coal costs could partially support EBITDA, the brokerage noted.
For structural steel tube companies, Axis Direct expects a strong quarter for APL Apollo Tubes, while JTL Industries may see a slightly muted performance.
JM Financial also estimates that operating profit across its metals coverage universe could decline by around 5% QoQ, driven by weaker realisations and rising raw material costs.
Motilal Oswal expects ferrous companies to report 4% QoQ volume growth (10% YoY), offsetting a 3% QoQ decline in NSR and resulting in flat to marginal revenue growth. Higher coking coal costs and weak NSR may reduce EBITDA per tonne by ₹1,000–1,500 QoQ, leading to an overall EBITDA decline of 9% QoQ (up 13% YoY).
The brokerage anticipates non-ferrous companies to post QoQ growth of 5% in revenue, 12% in EBITDA and 18% in PAT, driven by healthy NSR and volumes, although Hindalco may report muted earnings due to weaker performance at Novelis.
For mining companies, Motilal Oswal expects strong earnings on the back of volume recovery, with Coal India volumes up 12% QoQ and NMDC volumes rising 19% QoQ. Meanwhile, Midwest’s revenue, EBITDA and PAT are projected to grow 20%, 20% and 36% QoQ, respectively.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.
