Metal shares snapped their three-day losing streak on October 9 as base metal prices rose on supply concerns from major mines, including Freeport's Grasberg mine in Indonesia.
Nifty Metal was the top sectoral gainer on October 9 by rising 1.6% after falling 1.4% in the previous three sessions.
The gains on the sectoral index were driven by Hindustan Copper, SAIL, Tata Steel, which rose 4.6%,3.07%, 3.05%, respectively. Shares of NALCO and NMDC rose 2.4% and 2.3%, respectively.
Copper is trading close to a record high following a series of mine outages that are crimping supply, including Indonesia’s Grasberg, the world’s second-biggest producer. The Freeport-McMorRan Inc. operation may only resume by mid-2026, according to state news agency Antara, which cited a local official.
Copper also climbed because minutes from the Federal Reserve showed a willingness from participants to lower interest rates again this year, which would provide a potential boost to non-yielding assets.
Investors see rate cuts likely in October and December.
Shanghai copper jumped to a more than 16-month high on Thursday as trading resumed in China after the National Day holiday, with concerns over supply from major mines supporting prices in an already tight market.
The most-traded copper contract on the Shanghai Futures Exchange closed daytime trading 4.22% higher at 86,730 yuan ($12,165.97) per metric ton.
Iron ore futures advanced on Thursday, supported by inventory restocking at Chinese steel mills following the National Day holiday, although profit margins and concerns over trade restrictions on steel weighed on market sentiment.
Tata Steel Ltd. Thursday said the production of crude steel at its Indian plants in the September quarter was 5.67 million tonnes, up 8% on quarter and 7% on year. This growth was driven by the normalisation of operations after the completion of the relining of a blast furnace at its Jamshedpur plant, it said in an exchange filing.
In Apr-Sept, the company's plants in India manufactured 10.90 million tonnes of crude steel, up 3% on year. These figures are provisional and include production at its standalone units and Neelachal Ispat Nigam Ltd. on a pro forma basis.
Meanwhile, the European Commission proposed on Tuesday cutting tariff-free steel import quotas by almost half and a 50% duty for excess shipments in a bid to preserve viable steelmaking in the European Union.
Due to rising imports and US tariffs, EU steel producers are operating at only 67% of capacity and the new measures are designed to push that up towards 80%.
ICICI Direct said the impact from this move is likely to be minimal for Tata Steel and Steel Authority of India as they have less than 8% share of exports. "Moreover, Tata Steel will be beneficiary given it has a 7 MTPA (million tonnes per annum) production capacity in Netherlands, which accounts for 25% of the consolidated revenue of the company," the broking firm said.
The metal sector is expected to report a strong performance for the September quarter, driven by domestic demand and lower steel prices, according to some brokerages.
Hindustan Zinc and Lloyds Metals and Energy were up over 4%, the latter over silver's tearaway rally.
"Metal stocks surged today, ending a three-day decline with the Nifty Metal index rising 1.6% as several factors came together. Severe disruptions at Freeport-McMoRan’s Grasberg copper mine in Indonesia, which declared force majeure after massive flooding, have taken about 3% of global copper supply offline. This situation pushed LME copper prices above $10,660 per tonne and sparked broad buying interest. The European Commission announced plans to cut tariff free steel quotas by 47% and impose 50% duties on excess imports, benefiting firms with EU footprints like Tata Steel.
"Additionally, India’s government approved a Rs 7,350-crore scheme for rare-earth magnets to lessen reliance on China and increase domestic production. This news improved sentiment for PSU miners such as GMDC, Hindustan Zinc, and NLC India. This combination of supply issues, trade protections, and supportive policy measures has fueled one of the most significant rallies in metals this year," said Abhinav Tiwari, Research Analyst at Bonanza.
Kotak Institutional Equities expects margins to decline for steel companies, mainly led by seasonally weak steel prices. However, base metal producers should see a strong quarter, led by higher base metal prices across most commodities on a weaker dollar and interest rate cuts, reported Informist. "We see a downside risk to aluminum prices from current levels, given the lack of cost support and weaker demand in second half of FY26. We remain cautious on aluminium producers Hindalco Industries and Vedanta," the brokerage said.
Prabhudas Lilladher expects revenue; EBITDA; and profit after tax growth of 14%, 22%, and 26% on year, respectively, for its metal coverage.
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