Metal shares stayed firm for a third day in a row, supported by favourable macro cues and sectoral optimism. Here are the major factors contributing to the rally
Investors continued to lap up metal stocks for the third straight session on July 3, 2025 amid favourable macro cues and sectoral optimism. Nifty Metal index, which tracks the sector’s performance, rallied up to 9,786.15 in early trade, up 0.90 per cent. Over the past three sessions, the index is up by 2.64 per cent.
NMDC rose up to 2.41 per cent, Jindal Steel and Power advanced up to 1.70 per cent, and Jindal Stainless gained as much as 1.98 per cent.
Heavyweights Tata Steel and Hindalco also surged between 1.40 per cent and 1.75 per cent, followed by JSW Steel, which rose as much as 0.75 per cent. Welspun Corporation, Hindustan Zinc, and National Aluminum were other gainers from the index.
Declining Raw Material Prices: The state-run miner NMDC slashed the prices of iron ore for the third straight month in July.
The price of Baila Lump iron ore has been reduced to Rs 5,700 per tonne, down Rs 600 from June and Rs 740 from May. Baila Fines now cost Rs 4,850 per tonne, also Rs 500 cheaper than last month and Rs 650 below May levels.
Since NMDC, a Navratna public sector undertaking (PSU) under Ministry of Steel, is the largest iron ore producer in India, it has a considerable influence over domestic prices.
Iron ore is a key raw material for steel production. Based on this, steel producing companies are expected to improve their profitability outlook in the near term.
China’s Factory Output Expands: China’s manufacturing activity showed signs of recovery in June, which offered a glimmer of hope for global metals demand. The Caixin/S&P Global manufacturing PMI rose to 50.4 in June from 48.3 in May. The rebound was led by a pickup in new orders and production.
The improved domestic production trend in China bodes well for Indian steelmakers and metal producers. As the world’s largest consumer of industrial metals, a manufacturing rebound in China typically leads to higher global prices of steel, aluminium, and copper.
China Steel Production Curb: Chinese steel mills in Tangshan have been asked to continue curbing production. This curb is a part of China’s push to improve air quality and enforce stricter environmental norms.
Lower steel production in China, one of the world's largest producers, can tighten global supply and support prices. Investors anticipate that this could improve the pricing power and export prospects for Indian players and offer them a potential edge in both domestic and international markets.