Metal Stocks Soar Up to 5.5% as Dollar Weakens and China Slashes Capacity
Metals are roaring back—and traders are riding the wave.
Dollar Dives, Metals Rally
A softening greenback sent commodity prices climbing. Industrial metals led the charge, with some sectors posting gains as high as 5.5%.
China Cuts, Markets React
Beijing’s latest capacity reduction move tightened supply—just as global demand perked up. Less production, higher prices. Classic economics—or just clever market timing?
Where’s the Real Momentum?
Sure, metals are hot now. But let’s be real—if you’re not hedging with crypto, you’re still playing last decade’s game. Gold is shiny, Bitcoin is sovereign.
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Market sentiment received additional support from China’s “anti-involution” plan to reduce steel capacity by 50 million tons in CY25, targeting an 8.5 per cent production cut for the remainder of the year. CLSA noted that despite Chinese steel production dropping by 20 million tons over January-July 2025, the country’s steel exports remain at all-time highs, creating a complex supply-demand dynamic.
Both CLSA and Citi have turned optimistic on the sector. CLSA tweaked its FY26-28 EBITDA estimates for metals and mining companies by -4 per cent to +8 per cent to reflect recent price movements and expects market tightening to improve spreads and increase profitability for Indian mills. The brokerage particularly favors JSPL given its strong capacity addition-driven growth outlook and continues to prefer aluminum plays like Hindalco and Vedanta.
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Citi echoed similar sentiments, adjusting target prices by -3 per cent to +6 per cent and maintaining a positive stance on the sector as market conditions tighten.
The broader metal index showed strong participation with 14 stocks advancing and only one declining. Tata Steel emerged as the most active by both volume and value, recording trading worth ₹913.37 crores. Other notable gainers included Hindalco (2.65 per cent), Vedanta (1.71 per cent), and National Aluminium (2.84 per cent). The sector’s strong performance reflects growing investor confidence in the structural improvement of metal fundamentals.
Published on September 3, 2025
