Metal stocks gain on rally in aluminium prices

Hindalco was the top gainer in the early hours of the trade on Tuesday supported by a sharp jump in Aluminium prices. The prices have surged from US$2,004 per tonne in the first week of April to US$2,151 per tonne currently on London Metal Exchange.

The prices have jumped almost 7.3 per cent in the first week of April. This has been the biggest gain in the past 7 years. The rally in aluminium prices was triggered by US sanctions on Russian oligarchs, which includes aluminium giant Rusal.

Rusal is one of the largest aluminium producers in the world and accounted for 7 per cent of total global production in 2017. The company produced 3.7 million tonnes of aluminium and 11.5 million tonnes of alumina in 2017. The company also produced Bauxite, 11.4 million tonnes in 2017 making up for 4 per cent of global productions.

The clampdown on Rusal has created supply constraints in the global market leading to rally in aluminium prices. The rising tensions between the two nations have impacted international trade as names of many Russian industries were included in the US sanction list.

Metal stocks rallied during early trade hours on Tuesday. Hindalco rallied the most and is currently trading at Rs. 228 per share up by 3.3 per cent, Nalco (National Aluminium Co. Ltd.) is trading at Rs. 72.35, up by 2.9 per cent and Vedanta was trading at Rs. 284.9 per share up by 1.26 per cent