Aluminium stocks surge amid Russia-Ukraine tensions; Hindalco hits 52-week high

Shares of metal companies, especially aluminium, emerged as biggest gainers in Monday’s trade in an otherwise volatile market, led by sectoral leaders such as Hindalco Industries, Jindal Steel & Power, Tata Steel, JSW Steel and Steel Authority of India (SAIL). The rally in the mining sector was boosted by fresh Western sanctions against Russia for its invasion of Ukraine, which raised concerns about supply disruptions.

As per a Crisil Research report, Russia and Europe together account for nearly 10% of global aluminium supply. The escalated conflict in the eastern European region is likely to disrupt supply, which may provide opportunities for other exporting countries like India to fill the gap.

At 2:30 pm, the BSE Metal index was the top performer on the sectoral front with a 4.5% gain amid hopes that the ongoing Russia-Ukraine tensions may create export opportunities for Indian metal companies. In comparison, the BSE Sensex traded 0.23% higher at 55,989 points.

The top gainers in the metal space were Hindalco Industries, Jindal Steel and Power, Tata Steel, JSW Steel, Steel Authority of India (SAIL), National Aluminium Company, Vedanta and Hindustan Copper.

Shares of Hindalco Industries, one of the country’s leading aluminium and copper manufacturing company, gained as much as 8.3% to hit a fresh 52-week high of ₹578.35 apiece on the BSE. The stock breached its previous high of ₹553.85 touched on February 11, 2022. There was a surge in volume trade as 5.93 lakh shares worth ₹33.23 crore changed hands over the counter as compared to the two-week average volume of 2.86 lakh scrips. The market capitalisation of the Aditya Birla Group company surged to ₹1.29 lakh crore.

Among others, Jindal Steel and Power and Tata Steel rose up to 5%, JSW Steel and SAIL climbed around 4%, National Aluminium Company, Vedanta and Hindustan Copper gained up to 3% on the BSE.

Russia is one of the biggest producers of aluminium and nickel and constitutes about 6-7% of the global supplies. Besides, it is also one of the major producers of gas used to generate electricity, a key component of aluminium production.

The new harsh sanctions against Russia by the U.S. and other Western countries have pushed aluminium prices to record high, which was already grappling with limited supply. The London aluminium futures hit a record high on Monday amid fresh supply chain disruption in the wake of the Russia-Ukraine conflict.