Three metal stocks to keep an eye on today!

On Friday morning, the headline indices, i.e. Nifty 50 and Sensex opened flat amidst volatility, at the beginning of the new financial year. The Sensex was at 58,814.47, up by 245.96 points or 0.42% and the Nifty was at 17,266.05, up by 118.90 points or 0.69%.

On the BSE 2,264 shares have advanced, 650 shares have declined and 92 shares are unchanged.

BSE Metal index is trading in the green territory at 22,673.00, up by 1.36%. Top gainers of the index include Tata Steel, NMDC, Hindustan Zinc, SAIL, APL Apollo, and JSW Steel.

The Nifty Metal index was trading at 6,507.05, up by 1.30%. The top gainers were of the Nifty Metal pack are Welspun India, Hindustan Zinc, SAIL, MOIL, NMDC, and Jindal Steel.

The Russia-Ukraine war has sent global commodity prices into a frenzy. The prices of nickel, in particular, have shot through the roof, given that Russia is a major producer, and the effects are being felt all over the world. India does not import nickel from Russia (which controls almost 8% of the global supply) but it is still feeling the squeeze since the overall supply has been affected and caused extreme price volatility.

Perhaps the most affected industry in India on account of this is stainless steel, which is a major importer of nickel. The price of nickel reached USD 100,000 per ton on the London Metal Exchange, after which the exchange had to suspend trading. While the price of nickel has cooled down significantly from those highs, it continues to affect stainless-steel manufacturers and thereby the end consumers. On Friday, the price of nickel was at USD 35,500 per ton.

Top Metal Stocks to watch out for are – Vedanta, Tata Steel, JSW Steel, Hindalco Industries, SAIL, and Coal India. 

Tata Steel Limited: Tata Steel has acquired the ferro-alloy business of Stork Ferro and Mineral Industries for Rs 155 crore. The company has two 16.5 MVA furnaces with an annual production capacity of 53,000 tons per annum at Balasore, Odisha. The deal is expected to be completed two months after signing of the asset transfer agreement. The asset acquisition will provide Tata Steel with an inorganic growth opportunity to augment its ferro alloy processing capacities. The scrip of the company was up 1.48% at Rs 529.30 on the BSE.

Vedanta Limited: The company's Board has approved plans to source 580 MW of renewable energy for its operations across India. In a statement to the stock exchanges, Vedanta has signed a power delivery agreement with special purpose vehicles (SPVs) i.e. affiliates of Sterlite Power Technologies Pvt Ltd (SPTPL) – a company engaged in business to supply hybrid‐based power with solar, wind and storage solutions. The miner aims to partially replace its existing captive thermal power capacities with renewable energy for smelting and associated operations, and meet power requirements of capacity expansion at Vedanta Aluminium Limited, Balco in Odisha and Hindustan Zinc in Rajasthan.

Hindalco Industries Limited: Hindalco Industries, an Aditya Birla Group company, has earmarked capex of USD 2.5-3 billion (about Rs 18,500-22,000 crore) on a consolidated basis over the next five years. The company is on track to implement organic growth projects entailing a capital outlay of over USD 1-billion towards Utkal alumina expansion, various aluminium and copper downstream expansions and speciality alumina projects. In Novelis, the capex will be invested mainly in auto-finishing line expansions in the US and China and rolling and recycling capacity expansions in Brazil.

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