Nifty Metal index surges 3%; why Tata Steel, SAIL rallied up to 6% today?

Metal stocks were in demand on Wednesday amid buzz that the government may reallocate non-operational iron ore mines held by SAIL and OMC.

Metal stocks rally today

Shares of metal companies mainly steel makers were in demand with Nifty Metal index surging 3 per cent on the National Stock Exchange (NSE) in Wednesday’s intra-day trade as the dollar weakening led to an increased demand for commodities.

 

At 01:48 PM; Nifty Metal index, the top gainer among sectoral indices, was up 3 per cent, as compared to 0.23 per cent rise in the Nifty 50. Thus far in the calendar year 2025, metal index has outperformed the market by surging 12 per cent, as against 4 per cent gain in the benchmark index.

 

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Among individual stocks, Tata Steel surged 6 per cent to ₹167.73 in intra-day trade. The stock price of Tata group company was trading close to its 52-week high of ₹ 170.18 touched on September 30, 2024.

 

Hindustan Copper, Steel Authority of India (SAIL) and Jindal Steel and Power (JSPL) soared 5 per cent each. National Aluminium Company (Nalco), JSW Steel, Hindalco Industries, Vedanta and NMDC were up in the range of 2 per cent to 3 per cent.

 

Generally, when the dollar weakens, international buyers of commodities can buy more units for $1 as the commodities are traded in dollars. This comes as positive news for Indian metal producers as the demand increase could indicate improved production for the Indian mills. Furthermore, this has led to an upward EBITDA revision for the metal producers in India for FY26, said Anubhav Sangal, Sr. Research Analyst at Bonanza.  ALSO RAED: 14 smallcap stocks hit all-time highs; Apollo Micro zooms 80% in 1 month 

 

Meanwhile, as per media sources, the government is considering reallocating non-operational iron ore mines currently held by SAIL and Odisha Mining Corporation Ltd (OMC). The move is aimed at augmenting the supply of the critical raw material required for steel production. The reallocation could be undertaken either through fresh auctions or by transferring the assets to other state-run enterprises. Additionally, the government may also explore levying an 20 per cent export duty to further strengthen domestic availability.

 

These initiatives aim to boost domestic iron ore production and stabilize prices, in line with the government’s target of 300 MT steel output, translating to ~437 MT iron ore demand by 2030 (vs. 250–260 MT currently). Measures include auctioning ~20 MT of ore from pre-auction sites. However, since 2015, only 35 of 135 auctioned mines have become operational. Nonetheless, the government’s vision aligns with NMDC’s 100 MT target by 2030, ICICI Securities said in a note. The brokerage firm said they remain long-term positive on the stock, supported by capacity expansion, strong demand outlook, a cash-rich balance sheet, and healthy RoCE.

 

Analysts at Kotak Institutional Equities expect a quarter-on-quarter margin decline in September 2025 quarter (Q2FY26), led by seasonally lower prices. Recovery in domestic steel prices, with favorable seasonality and regional price strength should elevate margins in H2FY26E. The brokerage firm expects iron ore costs to be range-bound with a negative bias and find better risk-reward in non-integrated steel producers.

 

Meanwhile, overall, the global aluminium industry is poised for growth, driven by rising demand in construction, automotive and packing industries. However, it remains vulnerable to trade tariffs, potential geopolitical disruption, supply uncertainty, sustainability and regulatory pressure, Nalco said in its FY25 annual report.

 

The key demand drivers for aluminium in India are Auto, Power, Electronics, Railway, Aerospace, Defence, Packaging and Solar energy. In addition to that the Indian Aluminium demand is expected to see healthy growth due to strong government infrastructure development plan, urbanization, and growing focus on lightweight vehicles, the company said.