Metal Stocks Rally on Dollar Weakness and China’s Capacity Cuts

Metal stocks surged sharply in afternoon trading, with Tata Steel leading gains at 5.47% to ₹167.06. Jindal Steel & Power and SAIL followed closely, climbing 4.18% and 4.09%, respectively. The Nifty Metal index ROSE 2.70% to 9,637.90 points.

A weakening dollar fueled the rally, boosting commodity demand as international buyers gain more purchasing power. Anubhav Sangal of Bonanza notes this bodes well for Indian producers, potentially driving higher domestic mill output and upward EBITDA revisions for FY26.

China's plan to cut steel capacity by 50 million tons in CY25 added momentum. Despite a 20-million-ton production drop year-to-date, Chinese steel exports remain at record highs, creating a complex market dynamic. Both CLSA and Citi have turned bullish on the sector, with CLSA adjusting its FY26-28 EBITDA estimates for metals and mining firms between -4% to +8%.