Hindalco, Tata Steel to Adani Enterprises: US-China tariff war singes metal stocks; Nifty Metal sinks 8% to 52-week low

Stock market crash: Indian domestic metal stocks have emerged as the biggest casualties for the second straight session on Monday, April 7, as the intensifying trade war between the United States and China triggered concerns over demand for raw materials.

After plunging 6.56% in the previous session, the Nifty Metal index tumbled another 8.60% to the day's low, hitting a fresh 52-week low of 7,690 points.

Eight out of the 15 constituents in the index also touched their respective 52-week lows, including notable names such as NALCO, Adani Enterprises, NMDC, Tata Steel, Hindalco Industries, SAIL, and Hindustan Copper. Among the top losers, Lloyds Metals & Energy led the pack with a drop of over 13% as of 2:30 P.M., followed by NALCO and JSW Steel, each down more than 8%.

China's retaliation measures spark demand woes

In response to Donald Trump's 34% tariffs, China immediately retaliated with matching 34% duties on American goods, escalating the trade war between the world’s two largest-economies and putting pressure on base metal prices.

In his first term, Trump’s tariff threats brought world leaders to his door to cut deals. This time, his actions so far have led to steep retaliation from China and promises from European allies to push back.

The tit-for-tat policies have also raised fears of a sharp fall in demand for copper, zinc and other industrial metals, as both economies together account for 45% of global GDP.

China's tariffs on American goods will take effect from April 10, with Beijing opting out of negotiation talks. Beijing also stated it would file a complaint against the United States at the World Trade Organization and restrict exports of rare earth elements used in advanced medical and electronics technologies.

Trump responded on social media, warning that “China played it wrong,” adding this was something “they cannot afford to do.” China’s retaliatory measures have sparked fears that other nations may also follow suit after the U.S. imposed sweeping tariffs on 180 countries last week.

With the latest 34% tariffs on Chinese imports, the total U.S. tariff rate on Chinese goods has climbed to 54%. Trump had earlier proposed that he would levy 60% duty on Chinese imports.

According to various reports, Canada is also preparing countermeasures in response to the escalating trade war, as Trump raises U.S. tariff barriers to their highest levels in more than a century—triggering a sharp sell-off in global financial markets.

Meanwhile, Trump’s widest-ranging tariffs to date took effect Saturday. By April 9, around 60 trading partners — including the European Union, Japan, and China — will face even higher tariffs tailored to each economy.

Trump is also reportedly considering tariffs on semiconductors, which has triggered the worst intraday drop in Taiwan’s markets today, as the country is one of the world’s leading chip manufacturers.

Q4FY25 preview: What to expect from metals and mining companies

According to the domestic brokerage firm Axis Securities, steel companies like Tata Steel and SAIL are expected to post sequential EBITDA growth of 6% and 35%, respectively in Q4, driven by higher sales volumes and lower coking coal costs, despite a slight drop in steel price realizations.

The brokerage noted that aluminium companies Hindalco and NALCO are set to report strong YoY growth in EBITDA and margins, aided by higher alumina prices (up 44%) and LME aluminium prices (up 19%). Sequentially, Hindalco's earnings are expected to rise, while NALCO may see a margin contraction due to lower alumina prices.

Among structural steel tube makers, the brokerage said APL Apollo is expected to report record sales and EBITDA growth as construction activity picks up. JTL, however, continues to face weak volumes and is likely to post a drop in EBITDA. The outlook for the structural steel segment is improving from Q1FY26.

Disclaimer: The views and recommendations given in this article are those of individual analysts. These do not represent the views of Mint. We advise investors to check with certified experts before taking any investment decisions.