Key facts
- Indian aluminium stocks fell significantly following a drop in global aluminium prices.
- The price decline was triggered by news of a US-Iran peace deal framework.
- The deal is expected to improve supply prospects from Gulf producers.
- The reopening of the Strait of Hormuz is anticipated to impact Indian producers.
- Hindalco Industries, NALCO, and Vedanta Aluminium shares dropped up to 6%.
Indian aluminium stocks experienced a significant downturn, with shares of major producers like Hindalco Industries, NALCO, and Vedanta Aluminium falling by up to 6%. This decline was directly linked to a sharp drop in global aluminium prices, which plummeted following the announcement of a peace deal framework between the United States and Iran.
The market anticipates that the deal will improve the prospects for commodity deliveries from Gulf producers. A key factor is the expected reopening of the Strait of Hormuz, a critical waterway for global oil and commodity shipments that Iran had effectively closed for months. Middle Eastern aluminium producers, accounting for approximately 9% of global supply, utilize this strait to ship their metal to international markets.
The benchmark three-month aluminium contract on the London Metal Exchange (LME) saw a substantial fall, dropping more than 4% to $3,379.50 per metric ton, and at one point plunging 5% to $3,357 a metric ton, its lowest level since March 27. US President Donald Trump announced the finalization of the agreement on his social media platform, stating the Strait of Hormuz would reopen on Friday and the US would end its blockade of Iranian ports.
In response to the news, National Aluminium Company (NALCO) shares tumbled nearly 6% to trade at Rs 360, while Vedanta Aluminium Metal dropped 5% to hit its lower circuit at Rs 471.11. Hindalco Industries shares also declined by more than 3%. These stocks were leading losses on the Nifty Metal index, which was down around 2% despite an overall uptrend in the broader market.