Why Tata Steel, Hindalco and Hindustan Copper Shares Dropped Up to 9% Today?

On April 4, Indian metal stocks witnessed a steep fall as the Nifty Metal index slumped by 6.56% to 8,414 points. This sharp decline wiped out gains from the last 19 trading sessions, making it the biggest intraday fall for the index since March 2024. Every stock on the index closed in the red, led by Hindustan Copper, which dropped over 9%, followed by NALCO, Vedanta, Tata Steel, and Hindalco—each losing more than 8%.

The broader sell-off was fuelled by growing concerns about new trade measures from the United States, particularly potential tariffs on copper and other key metals. The development sent shockwaves through Dalal Street, triggering heavy profit booking in metal counters.

Tariff Tension from the US

The latest pressure on Indian metal stocks stems from news that the US administration is mulling fresh tariffs on copper—previously excluded from recent rounds of trade duties. The announcement follows former President Trump’s sweeping reciprocal tariffs ranging between 10% and 49% on goods from 180 countries.

This aggressive stance, especially against China, has raised fears of a global trade war. China, being a major consumer and exporter of base metals, now faces a 34% levy on its exports to the US, bringing the total new tariffs to 54%. In retaliation, Beijing has already imposed duties on US agricultural exports, deepening global trade tensions. Such developments tend to unsettle global markets, particularly the metal segment, which is highly sensitive to shifts in international demand and pricing.

Impact on Indian Metal Giants

Though Indian steelmakers like Tata Steel and Hindalco have minimal direct exposure to the US market—with just 2.5% of India’s steel exports headed to the US—the broader fear is about redirected trade flows. Countries heavily dependent on the US for metal exports may start flooding other markets, including India, with excess supply.

This oversupply can lead to a fall in domestic prices, affecting the profitability of Indian players. Additionally, the ongoing tariff uncertainty could disrupt global supply chains and impact sectors such as automotive and construction, which are key consumers of metals.

Hindustan Copper Leads the Fall

Hindustan Copper share price fell over 9%. Being closely tied to copper—a metal directly in the spotlight due to proposed US tariffs—its stock was hit hardest. Other base metal producers like NALCO and Vedanta also bore the brunt, reflecting investor nervousness about future demand and pricing volatility.

China’s Influence on Global Metal Demand

China remains the world’s largest consumer of base metals, accounting for nearly half of global consumption. Its demand largely comes from infrastructure, manufacturing, and its growing electric vehicle and renewable energy sectors.

Earlier this year, China set its GDP growth target for 2025 at around 5%, mirroring last year’s target. Following this, copper prices surged past $10,000 per tonne in the previous month.

Outlook for Metal Stocks Ahead

While the immediate sell-off reflects global trade worries, the longer-term outlook for Indian metal stocks will depend on how the tariff situation unfolds and how global markets react. Domestic factors such as infrastructure spending, industrial growth, and supportive government policies could offer some cushion.

However, until there’s more clarity on international trade relations, especially between the US and China, volatility in the metal sector may continue. Investors are likely to remain cautious, keeping a close watch on global cues and base metal price movements in the coming weeks.

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