By Vineet Kumar 
Nalco, Hindalco, Vedanta Surge as China Pulls Back Aluminium Export Tax Rebates
Shares of Nalco, Hindalco, and Vedanta saw a significant rally of up to 9% on November 18, fueled by China’s recent decision to slash or eliminate export tax rebates on certain aluminium and copper products. This move is expected to shake up the global aluminium market, tightening supply and potentially benefiting Indian producers.
Why This Matters
China, the world’s largest producer of aluminium and alumina, dominates the export of semi-finished aluminium products. These exports often end up as raw material for value-added manufacturing or are re-melted into commodity-grade products. By reducing these exports, China could create a supply gap in the global market, driving up aluminium prices.
For Indian aluminium giants like Nalco, Hindalco, and Vedanta, this is a golden opportunity. With less competition from Chinese exporters, these companies are likely to see higher demand for their products, potentially boosting their revenues.
Market Reaction
Investors quickly latched onto this development, sending stock prices soaring:
Nalco: The biggest gainer of the day, Nalco’s shares jumped over 9%, reaching ₹240.32 on the NSE by mid-morning. This marks the second straight session of gains for the stock, which opened today with a 2.79% increase.
Hindalco: Riding the wave, Hindalco’s stock touched an intraday high of ₹656, up 4.57% from its previous close. It opened with a 2.32% gain and continued its upward momentum.
Vedanta: Not to be left behind, Vedanta shares climbed nearly 4%, trading at ₹450.10 by 10:30 am.
The Bigger Picture
To put this into perspective, imagine a manufacturing giant in Germany that relies on Chinese aluminium for producing car parts. If China curbs its exports, that company might turn to Indian producers like Nalco or Hindalco to fill the gap, especially if prices remain competitive. This shift could also encourage global players to diversify their sourcing strategies, reducing reliance on Chinese suppliers.
Historically, any reduction in Chinese aluminium exports has tightened global supply, often leading to price hikes. If this trend holds, Indian producers stand to gain not just from higher sales volumes but also improved margins.
In summary, China’s policy change might just have handed Indian aluminium companies a strong tailwind to boost growth. With supply dynamics shifting, the spotlight is now on Indian producers to capitalize on this global opportunity.
