The shares of aluminium-makers like Hindalco Industries, NALCO, recently-listed Vedanta Aluminium and others sharply dropped up to 6% as aluminium prices crashed following the Iran-US peace deal framework that improved prospects for deliveries from the Gulf producers.
The benchmark three-month aluminium contract on the London Metal Exchange (LME) dropped more than 4% to $3,379.50 per metric ton. Earlier during the session, the contracts plunged 5% to $3,357 a metric ton, its lowest level since March 27.
US President Donald Trump announced on Sunday that the much-awaited agreement has been finalised. "The Deal with the Islamic Republic of Iran is now complete," Trump wrote on his Truth Social platform. He further said that the Strait of Hormuz, a vital route for global oil shipments that Iran has effectively closed for months, would reopen on Friday, while the US would end its blockade of Iranian ports. "Ships of the World, start your engines. Let the oil flow!" Trump wrote.
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Meanwhile, Iran said that the newly announced agreement with the United States puts an "immediate end" to the countries' war. "A permanent and immediate end to the war has been declared on all fronts, including Lebanon," Iran's Deputy Foreign Minister Kazem Gharibabadi said in televised comments in the early hours of Monday.
Aluminium producers from the Middle East typically account for nearly 9% of global supply, and the suppliers use the narrow 33-kilometre waterway connecting the Persian Gulf with the Gulf of Oman to ship their metal to global markets and import raw materials.
The reopening of the Strait of Hormuz may lead to further downturn in aluminium prices, which can bear an impact on the Indian aluminium producers.
Aluminium stocks crash
National Aluminium Company (NALCO) shares tumbled nearly 6% to trade at Rs 360 apiece, while those of Vedanta Aluminium Metal dropped 5% to hit the lower circuit at Rs 471.11 apiece. Hindalco Industries shares dropped more than 3%.
These stocks are currently leading losses on the Nifty Metal, which is down around 2% despite market uptrend, as seen at 11.50 am.
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(With inputs from agencies)
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