Indian metal companies to benefit from Russia’s supply disruption due to war with Ukraine

• Metal stocks were top gainers in a weak market as the price of most metals went up on fears of supply constraint from Russia, one of the large producers of metals.
• Russia and Europe account for nearly 10% of global primary aluminium supply and Russia is among the steel exporters.
• The inability to export metals from Russia has thrown in a golden opportunity for Indian metal producers to fill the gap.

Shares of Indian metal companies were on an upward trend in a weak market, on Wednesday, as the Russia Ukraine crisis threw opportunities for the metal companies to ramp up their export. Imposed sanctions and worsening ties with nations would impact Russia’s overall trade.

Reportedly, Russian aluminium producer Rusal has halted production at the Nikolaev alumina refinery in Ukraine, citing logistical challenges on the Black Sea and the surrounding area.

The inability to export commodities from Russia has thrown in a golden opportunity for Indian metal producers to fill the gap.

Russia and Europe account for nearly 10% of global primary aluminium supply and Russia is among the top steel exporters. Also, Russia reportedly supplies the world with around 10% of global nickel, which is used to make stainless steel and batteries for electric vehicles.

National Aluminium Company, Hindalco Industries, Bharat Aluminium Company and Vedanta Aluminium are some of the top aluminium producers in India.

Metal companies were outliers in the weak market on March 2, wherein Sensex fell nearly 2% due to weak global cues amid ongoing Russia-Ukraine war. Nifty Metal was the topmost gainer in the market.
Although India is far removed from the geographic location of the crisis, the worsening war between two largest producers of commodities have the potential of a major impact on the Indian economy both in good and bad ways.

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