Metal stocks have been on a tear lately. Stocks such as Hindustan Copper have soared by 60% over the last month, while Hindustan Zinc, National Aluminium, and Vedanta have jumped 15-27% in the same period.
Sectoral index Nifty Metal has jumped almost 11% compared to the benchmark Nifty 50’s over 1% gain over the last month. On Friday, 2 January, Nifty 50 and Nifty Metal hit their record highs of 26,340 and 11,433.80, respectively.
What’s driving metal stocks?
The primary factor behind the rally in metal stocks is the demand-supply mismatch. Additionally, robust gains in precious metals in 2025 have given a psychological push to industrial metals, such as copper, aluminium and Zinc.
Global factors are also at play as macro data from China has improved the demand outlook for metals.
“The rally is largely driven by global factors. Key economic data from the global front—especially China—has been supportive and is giving comfort to the markets. In addition, the strong performance we’ve seen in the bullion market has also lent momentum to metal stocks,” said Ajit Mishra, SVP of Research at Religare Broking.
Mishra highlighted that China remains a very important factor.
“Any improvement in Chinese demand or policy support has a direct impact on global metal prices, and that continues to play a role in the current rally,” said Mishra.
On the front of Industrial demand, sectors such as infrastructure, electric vehicles (EVs), and data centres are witnessing strong demand for metals. At the same time, a weaker US dollar is helping maintain positive sentiment across commodities.
On the domestic front, the imposition of anti-dumping duties has also acted as a tailwind, supporting metal prices and stocks.
As Mint reported, India has imposed a three-year safeguard duty of 12% on steel imports, according to a finance ministry order issued late on Tuesday, 30 December, as the government aims to curb cheap shipments, especially from China.
“Globally, demand remains strong across infrastructure, EVs, and data centres. Domestically, favourable policy measures such as anti-dumping duties are providing additional support. Put together, these factors are driving the current uptrend in metal stocks,” said Mishra.
Can metal stocks rise further?
Experts expect a bull run in metal stocks may continue, as ongoing investments in EVs and data centres are expected to sustain demand, particularly for metals like copper and silver, which are heavily used in these sectors.
Besides, momentum in the auto sector will also augur well for the metal stocks.
“The auto sector is a major consumer of metals like copper and aluminium. Steel, in particular, is a key input. After the imposition of anti-dumping duties, there could be some impact on auto companies that were relying on imports. However, overall auto sales numbers remain encouraging, which reflects a positive demand trend and continues to support metal prices,” said Mishra.
According to VK Vijayakumar, Chief Investment Strategist at Geojit Investments, the demand-supply dynamics in industrial metals are now in favour of a further rally in prices.
“The stellar performance of precious metals in 2025 has given psychological support to industrial metals. Demand for metals has good support from segments such as AI, alternative energy and EVs. Supply, on the other hand, continues to be tight, favouring a rally in prices. However, Chinese exports can dampen a rally,” said Vijayakumar.
“Resilient domestic demand, gradual absorption of new capacities and a meaningful recovery in buying activity in the Chinese property market remain the key themes that would drive domestic steel prices in 2026. ICRA has a stable outlook on the sector with expectations of industry OPBDITA/MT remaining above 100$/MT in the near term,” said Sumit Jhunjhunwala, Vice President, Sector Head, Corporate Sector Ratings, ICRA.
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Disclaimer: This story is for educational purposes only. The views and recommendations expressed are those of individual analysts or broking firms, not Mint. We advise investors to consult with certified experts before making any investment decisions, as market conditions can change rapidly and circumstances may vary.
