Hind Copper, Hindalco, Nalco shares rise despite overall weakness in metals: Here's why

Shares of copper and aluminium producers gained on June 18 despite weakness in the broader metals space, with Hindustan Copper, Hindalco and Nalco ending marginally higher even as the Nifty Metal index ended down over 0.7 percent.

This comes as prices of both the non-ferrous metals rose on reports that European inventories have significantly fallen amid rising geopolitical tensions in the Middle East. Copper futures with July expiry on the MCX were trading at around Rs 888.50, while those of aluminium were trading near Rs 247. Copper's prices on the London Metal Exchange have seen a notable rise.

Copper inventories have dropped 25 percent MoM in May, while those of aluminium fell 10 percent, according to data cited by Tata Mutual Fund. The fall in inventories may be due to a rise in the demand for these metals, which could cause further increase in prices, benefitting the margins of these companies, said experts.

Home prices in China have been in a no-growth trend to nearly two years despite policymakers' efforts to revive the sector, at a time when property investment are falling. "As China's housing market & real estate ties into copper, it hurt the copper price. Moreover, Copper inventories fell by 25% in May compared to a month ago, indicating at a higher demand," Tata Mutual Fund said.