Aluminium stocks slide 5% as prices hit 2-month low

What moved aluminium stocks on June 16

Shares of Vedanta Aluminium, Hindalco and National Aluminium Company (NALCO) fell up to 5% on June 16. The drop came as aluminium prices slid to the lowest level in more than two months. The trigger was an interim agreement between the US and Iran that laid the groundwork for resumption of metal shipments through the Strait of Hormuz. For aluminium markets, the Strait matters because it is a key route for raw material inflows and outbound metal flows from the Middle East.

The price move quickly translated into equity selling in Indian metal names. Traders often mark down aluminium producers when global benchmarks soften, because near-term realisations and sentiment tend to track international prices. The session also reflected broader caution in metals after a recent rally in commodity-linked shares.

Why the Strait of Hormuz mattered to aluminium pricing

The earlier phase of the Iran war had caused steep supply losses, according to the provided context. Middle Eastern aluminium smelters were targeted in missile attacks. At the same time, the closure of the vital waterway choked off supplies of incoming raw materials and outbound metal. Producers attempted logistical workarounds to keep plants running, but the war still left the industry facing a major supply deficit.

Against that backdrop, the interim US-Iran agreement shifted market expectations around physical supply. If shipments normalise through the Strait of Hormuz, the immediate scarcity premium can fade, putting pressure on aluminium prices. That is the price channel that fed into Indian metal stocks on June 16.

Government extends anti-dumping duty on aluminium foil imports

Alongside global cues, Hindalco, Vedanta and Nalco were also in focus after a policy update. The government extended anti-dumping duty on aluminium foil imports from China, Malaysia, Thailand and Indonesia until December 15, 2026. The stated intent of the move is to support domestic manufacturers of aluminium foils.

The Ministry of Finance, through a notification, amended Notification No. 51/2021-Customs (ADD) dated September 16, 2021. A new provision was inserted stating that, notwithstanding anything contained in the earlier notification, the anti-dumping duty will continue to remain in force up to and including December 15, 2026. Policy support can be constructive for specific downstream segments, but it did not offset the day’s global price-led pressure on aluminium-linked stocks.

Hindalco’s session: price and close

Hindalco shares ended 3.59% lower at Rs 1,038.90 against the previous close of Rs 1,077.55. The broader setup described in the input suggests a recent rally in metal prices had paused, with investors booking profits. In that environment, even small shifts in global pricing can push stocks down to short-term lows.

Market participants also linked the correction to a combination of retreating global metal prices and profit-taking after a sharp surge. The selling pressure was not limited to aluminium producers, as weakness was also visible across metal-linked contracts and stocks in the same period.

Wider metal tape: futures moves and profit booking

The decline in metal stocks aligned with a broader fall in global metal prices cited in the material. Key movements included silver futures on MCX declining up to ₹4,000 per kg. Gold, aluminium, and copper futures fell around 1% each. These moves contributed to metal stocks retracing after a sharp surge, with investors taking profits at elevated levels.

The metal sector also saw sharp correction on a Thursday referenced in the text, with Nalco and Hind Copper shares dropping around 5% and extending losses for the second consecutive session. The same drivers were highlighted: falling global metal prices and profit booking after a rally.

What Reuters reported on NALCO’s earnings pressure

A Reuters report dated April 30 said India’s state-owned NALCO reported a 16.6% fall in fourth-quarter profit, as higher costs and weaker alumina prices weighed on earnings. Expenses rose 10% to 28.98 billion rupees (INR 2,898 crore), partly due to higher raw material and operating costs. The report also cited analyst expectations that weaker alumina prices would limit margins at the company’s alumina unit, despite support from firm aluminium prices that had risen on global supply disruptions.

The same input noted Chinese domestic alumina prices fell about 5.5% quarter-on-quarter in the March quarter, with S&P Global attributing the pressure to demand conditions amid escalating tensions since late February.

Earlier volatility: February’s Novelis disruption and brokerage action

The input also referenced a separate episode on February 13, when Hindalco shares fell 5.5% to Rs 909 apiece after the company reported a 45% year-on-year drop in Q3 profit. The decline was linked to expenses tied to fire-related disruptions at its US unit, Novelis.

Global brokerage Citi cut the stock to “neutral” with a target of Rs 1,000. Citi cited Novelis disruption, higher cash flow impact and rising net debt as offsets to a structural aluminium upcycle, while also noting stable India upstream performance. The brokerage maintained consolidated earnings estimates, supported by a strong domestic business outlook, which was seen offsetting muted Novelis profitability for FY26 to FY27.

Hindalco’s Q3FY26 numbers cited in the material

For the quarter ended December 31, 2025 (Q3FY26), Hindalco’s consolidated EBITDA was reported at INR 8,543 crore, up 5% year on year. Profit after tax before exceptional items rose 8% to INR 4,051 crore. Reported net profit came in at INR 2,049 crore versus INR 3,735 crore a year ago, reflecting the Oswego disruption, partly offset by cost-efficiency benefits at Novelis and record profits in the India business.

These details matter because they show how stock reactions can be driven by a blend of commodity prices and company-specific operational events, even within the same sector.

Key facts table

What investors tracked next

For investors in aluminium and broader metal stocks, the immediate focus remains on the interaction between global prices and supply routes, especially any sustained change in shipping conditions through the Strait of Hormuz. The policy backdrop on aluminium foil imports is supportive for domestic manufacturers in that segment, but day-to-day stock performance can still be dominated by global benchmarks.

Separately, the earnings and operational updates cited for Hindalco and NALCO show that costs, alumina pricing and disruption-related expenses can materially influence profitability, even when aluminium prices are firm. Future trading sessions are likely to continue reflecting this mix of macro commodity signals and company-specific developments already on the market’s radar.