Hindalco, NALCO, Vedanta Aluminium shares rally up to 8%; here’s what’s fuelling aluminium stocks

Shares of aluminium producers rallied sharply on Wednesday, with National Aluminium Company (NALCO), Hindalco Industries and Vedanta Aluminium gaining up to 8%, even as the broader market remained weak. The positive sentiment was triggered by Norsk Hydro’s Alunorte alumina refinery in Brazil cutting production due to disruptions in natural gas supply.

Boosted by the development, NALCO shares jumped as much as 8.17% to ₹422, while Hindalco gained 3.44% to ₹1,088.25. Vedanta Aluminium shares rose 2.67% to ₹476.40. The three stocks were among the notable gainers in the metals space today.

The S&P BSE Metal index was up 0.92%, even as the Sensex and Nifty 50 declined 0.4% each, tracking weak global cues. The broader aluminium pack also saw strong buying interest, with Man Industries shares rising as much as 11%. PG Foils rose 2.02%, while MMP Industries and Maan Aluminium gained 1.29% and 0.97%, respectively.

The trigger for the rally was Norsk Hydro’s announcement that its Alunorte alumina refinery had temporarily reduced production to 50% of capacity following disruptions to natural gas supplies from CELBA, part of New Fortress Energy.

Alunorte has an annual alumina production capacity of around 6.3 million tonnes and is one of the world’s largest alumina refineries. Alumina is the key raw material used to produce primary aluminium.

According to Norsk Hydro, the refinery has implemented contingency measures, including purchasing spot gas volumes and seeking direct access to the Barcarena LNG receiving and regasification terminal. Production will be ramped up once gas availability normalises.

For Indian aluminium producers, the Alunorte disruption is a near-term positive sentiment trigger, particularly as tighter alumina availability could support alumina prices and benefit integrated producers. However, the sustainability of the rally will depend on the duration of the supply disruption, global aluminium demand and the trajectory of LME prices.

On the London Metal Exchange (LME), spot aluminium prices are currently around $3,373 a tonne, compared with an average of $3,565 a tonne in Q1 FY27. Albeit, aluminium prices have remained elevated amid declining exchange inventories and lingering geopolitical tensions.

Notably, aluminium producers are also facing higher input costs. Raw material inflation, including caustic soda, calcined petroleum coke (CPC) and heavy fuel oil (HFO), has increased aluminium production costs by around ₹15,000–16,000 per tonne compared with FY26 averages.