Why did Tata Steel, Hindalco and other metal stocks plunge up to 9% today? Key reasons explained

Stock market today: Indian metal stocks faced heavy selling pressure from Dalal Street investors during intraday trade on Friday, April 4, causing the Nifty Metal index to erase gains amassed over 19 consecutive sessions in a single day. The index crashed 6.56% to hit a one-month low of 8,414 points.

This was also the biggest intraday drop for the index since March 2024. All 15 constituents of the index ended the session in deep red, with Hindustan Copper emerging as the biggest laggard, falling 9.13%. It was followed by NALCO, Vedanta, Tata Steel, and Hindalco Industries, each closing with losses of over 8%.

Other metal stocks such as NMDC, Jindal Stainless, Welspun Corp, Hindustan Zinc, Jindal Steel & Power, and SAIL also declined more than 5%.

What triggered a sharp fall in Indian metal stocks today?

Today’s sharp sell-off in metal stocks was driven by reports that the White House is now considering tariffs on copper—one of the key commodities excluded from the recent round of reciprocal duties. Other metals such as zinc, nickel, and tin were also exempt from the country-specific tariffs, though they could be subject to Section 232 investigations in the future.

Earlier in March, Donald Trump had announced a 25% tariff on steel and aluminum imports.

On Wednesday, Trump unveiled sweeping reciprocal tariffs ranging from 10% to 49% on goods from 180 countries. The move prompted economists to lower global growth forecasts, raise the probability of a U.S. recession, and revise down growth expectations for the current year.

Trump announced stricter trade measures on China, the world’s second-largest economy and one of the biggest producers and consumers of base metals. The Chinese economy—already recovering slowly from the COVID-19 slump—now faces the threat of additional tariffs that could derail its fragile rebound.

Chinese imports will face a 34% levy, bringing total new tariffs to 54%. In response, Beijing has vowed countermeasures and had already targeted U.S. agricultural exports—such as chicken, pork, soybeans, and beef—with retaliatory duties last month.

Economists warn that the escalating trade conflict between the world’s two largest economies, which together account for around 45% of global GDP, could severely impact global growth and trade flows in the coming quarters, which could put more pressure on global metal prices.

Steel tariffs unlikely to dent prospects of Indian steel firms

Analysts had earlier stated that 25% tariffs imposed by the US on steel imports would have a limited direct impact on Indian steelmakers’ operations, given their minimal US export exposure.

However, they noted that a redirection of steel exports into India from countries with significant exposure to the US market, along with risks to growth in key end-use industries, could pressure domestic steel prices, depending on the severity and duration of the tariff war.

Global brokerage firm J.P. Morgan said that tariffs are unlikely to hurt Indian steelmakers significantly, as only 2.5% of India's steel export volumes are to the U.S. India's recommendation of a 12% safeguard duty on some steel products is a positive for the sector.

China’s economic health directly impacts global base metals demand

China consumes nearly 50% of the global output of base metals such as copper, aluminum, zinc, nickel, and lead, which is largely driven by the country’s massive manufacturing sector, which relies heavily on these metals for production.

Additionally, rapid urbanization and ongoing infrastructure development projects continue to boost consumption. China's push toward electric vehicles and renewable energy has further accelerated its need for base metals, reinforcing its position as the world’s largest consumer and a key influencer in global commodity markets.

Base metal prices in 2025 continued to stay elevated as copper prices also crossed $10,000 per ton last month after China set its GDP growth target for 2025 at around 5%, the same as the previous year.

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.