Hindalco, NALCO, Vedanta Shares Fall Up to 5% as Aluminium Prices Hit Two-Month Low
June 16, 2026: Hindalco shares, Vedanta shares and NALCO shares came under heavy selling pressure after aluminium prices dropped sharply in global markets. The decline followed reports of a US-Iran peace agreement that could reopen the Strait of Hormuz and ease supply disruptions that had supported aluminium prices in recent months.
The sharp fall in aluminium prices immediately impacted aluminium stocks, with the Nifty Metal index emerging as one of the worst-performing sectoral indices during the session.
The selloff has also raised an important question for investors: Is this a temporary correction in aluminium stocks or the beginning of a larger decline in aluminium prices?
Vedanta Shares Fall Aluminium Prices Crash After US-Iran Peace Breakthrough
Aluminium prices on the London Metal Exchange fell 4.4% to $3,379.50 per metric ton, marking their lowest level since March 27.
The decline came after the United States and Iran reportedly reached an interim agreement that could lead to the reopening of the Strait of Hormuz. The final agreement is expected to be signed later this week.
For months, concerns over supply disruptions in the Middle East had pushed aluminium prices higher. With those fears easing, traders quickly reassessed the outlook for aluminium prices.
As a result, aluminium prices witnessed one of their sharpest single-day declines in recent weeks.
| Company | Current Price (₹) | Change (₹) | Change (%) |
|---|---|---|---|
| Hindalco Industries | 974.60 | -39.30 | -3.88% |
| National Aluminium Company Limited (NALCO) | 360.30 | -22.05 | -5.77% |
| Vedanta Aluminium | 471.11 | -24.79 | -5.00% |
Performance Ranking (Best to Worst)
| Rank | Company | Decline (%) |
|---|---|---|
| 1 | Hindalco Industries | -3.88% |
| 2 | Vedanta Aluminium | -5.00% |
| 3 | NALCO | -5.77% |
Read More : Vedanta Demerger Goes Live: Aluminium Falls 5%, Yet Group Value Beats Rs 773 Pre-Split Price
Why Hindalco, NALCO and Vedanta Aluminium fell
The rally in aluminum prices over the last few months was largely driven by supply disruption fears caused by the US-Iran conflict:
- Missile attacks affected Middle Eastern aluminum operations.
- The closure of the Strait of Hormuz disrupted shipments of alumina, aluminum, and other raw materials.
- Traders priced in a potential global aluminum shortage, pushing LME aluminum above $3,500/ton.
Now, the preliminary US-Iran peace agreement has changed that narrative:
- Markets expect the Strait of Hormuz to reopen.
- Supply chains may normalize.
- Previously stranded inventories could reach the market.
- Supply-risk premiums embedded in aluminum prices are being removed.
As a result, LME aluminum fell about 4.4% to around $3,380/ton, its lowest level in more than two months.
Hindalco Shares Lead Metal Stock Losses
The fall in aluminium prices triggered a broad selloff across aluminium stocks and metal stocks.
At around 9:55 AM, the Nifty Metal index was trading 1.5% lower at 12,883.45.
Among the major losers:
- Vedanta shares fell nearly 5%
- NALCO shares declined 4.85%
- Hindalco shares dropped almost 4%
- Vedanta Aluminium was among the top laggards in the metal pack
Hindalco shares also emerged as the biggest loser on the Nifty 50 index during the trading session.
The sharp correction reflects concerns that lower aluminium prices could impact future earnings growth for aluminium producers.
Why Aluminium Prices Are Under Pressure
The recent Middle East conflict had significantly disrupted aluminium supply chains.
Several aluminium smelters faced operational challenges, while shipping restrictions through the Strait of Hormuz created bottlenecks for raw material imports and metal exports.
These disruptions helped push aluminium prices higher and supported strong gains in aluminium stocks.
However, the proposed US-Iran deal has changed market expectations.
Investors now expect smoother trade flows, improved availability of raw materials and a gradual increase in global aluminium supply.
That shift in sentiment is weighing heavily on aluminium prices.
Earnings Impact Analysis: Hindalco vs NALCO vs Vedanta Aluminium
The sharp decline in aluminium prices following easing geopolitical tensions is negative for all aluminium producers, but the impact on earnings is not uniform. The key factor is how dependent each company is on raw aluminium prices versus value-added products.
| Company | Sensitivity to LME Aluminium Prices | Earnings Impact |
|---|---|---|
| Hindalco Industries | Moderate | Downstream and Novelis operations provide a buffer against lower metal prices. |
| NALCO | High | Most exposed because it primarily sells alumina and primary aluminium. |
| Vedanta Aluminium | High-Moderate | Margins depend heavily on the spread between aluminium prices and input costs. |
Aluminium Companies: Key Data (FY26)
| Particulars | Hindalco Industries | NALCO | Vedanta Aluminium* |
|---|---|---|---|
| Stock Move (16 Jun 2026) | ▼ 3% | ▼ 6% | ▼ 5% |
| Q4 FY26 Revenue | ₹78,133 Cr | ₹5,103 Cr | ₹51,524 Cr |
| Q4 FY26 EBITDA | ₹11,197 Cr | — | — |
| Q4 FY26 PAT | ₹2,597 Cr | ₹1,718 Cr | ₹9,352 Cr |
| FY26 Revenue | — | ₹17,843 Cr | — |
| FY26 PAT | — | ₹5,816 Cr | — |
| Net Debt / EBITDA | 1.83x | Debt Free | 0.95x |
| Aluminium Price Sensitivity | Medium | Very High | High |
| Downstream Business | Strong (Novelis, rolled products, cans, foil) | Limited | Moderate |
| Risk if Aluminium Falls | Low | High | Medium-High |
| Overall Resilience | Highest | Lowest | Moderate |
Bank of America Sees Near-Term Risk for Aluminium Prices
According to Bank of America analysts led by Michael Widmer, aluminium prices could remain vulnerable in the near term.
“Aluminum prices look vulnerable near-term as supply risks ease and demand concerns persist,” the analysts said in a research note.
The brokerage highlighted that Middle Eastern production accounts for nearly 10% of global aluminium supply. However, rising output from China could offset earlier supply disruptions.
China remains the world’s largest aluminium producer, making its production trends a key factor for aluminium prices globally.
More Supply Could Add Pressure on Aluminium Stocks
Analysts believe several factors could keep aluminium prices under pressure in the coming months.
These include:
- Reopening of the Strait of Hormuz
- Release of Middle East aluminium inventories
- Higher aluminium production from China
- Increased output from Indonesian smelters
- Slower industrial demand growth
If these trends continue, aluminium prices could face additional downside pressure, impacting aluminium stocks such as Hindalco shares, Vedanta shares and NALCO shares.
Axis Securities Maintains Buy Rating on Hindalco and NALCO
Despite the sharp decline in aluminium stocks, Axis Securities remains constructive on the sector’s long-term outlook.
The brokerage said aluminium prices are unlikely to return to historical lows below $2,500 per ton.
“Prices are unlikely to retreat to historical sub-$2,500 levels,” the brokerage noted.
Axis Securities expects aluminium prices to remain supported by higher production costs, green energy investments and structural supply constraints.
The brokerage maintained its BUY rating on Hindalco and NALCO while keeping aluminium price assumptions unchanged at:
- FY26: $3,295 per ton
- FY27: $3,175 per ton
- FY28: $3,025 per ton
Here’s What Happened Today and Why Traders Reacted
Today’s market reaction was driven by a sudden change in global supply expectations.
For weeks, aluminium prices had been supported by concerns over supply disruptions in the Middle East. The US-Iran peace agreement reduced those concerns and triggered a sharp correction in aluminium prices.
As aluminium prices fell, investors rushed to book profits in aluminium stocks.
This led to significant declines in Hindalco shares, Vedanta shares and NALCO shares, while the Nifty Metal index also moved lower.
What Impact Does This Have on Investors?
For short-term traders, volatility in aluminium prices could continue as markets track developments surrounding the US-Iran agreement.
For investors holding Hindalco shares, Vedanta shares or NALCO shares, the key risk is whether aluminium prices continue to decline in the coming weeks.
However, long-term investors may find comfort in the fact that major brokerages continue to maintain positive views on leading aluminium stocks.
Going forward, investors should closely monitor aluminium prices, Chinese production trends, developments in the Strait of Hormuz and upcoming quarterly results from major aluminium producers.
While today’s selloff has put pressure on aluminium stocks, the longer-term outlook for Hindalco shares, Vedanta shares and NALCO shares will continue to depend on the global balance between aluminium demand and aluminium supply.
