Vedanta, NALCO and Hindalco Drop Up to 6% as UAE Mega Smelter Resumes Output
Metal stocks faced severe selling pressure on Dalal Street during Friday's trading session on October 23, 2026, with domestic aluminum producers leading the sector's decline following major supply developments in West Asia. Shares of Vedanta Aluminium Metal, National Aluminium Company (NALCO), and Hindalco Industries slumped by up to 6 percent as international markets reacted to the operational restart of a premier aluminum smelting facility in the United Arab Emirates. The sudden restoration of extensive production capacity is set to flood the international market with fresh primary aluminum ingots, tilting the global supply-demand dynamic into an immediate surplus and applying downward pressure on London Metal Exchange (LME) benchmark spot prices.
Al Taweelah Smelter Revival: EGA Restores 50% Capacity Post-March Disruption
The catalyst behind Friday's sell-off was an operational update from Emirates Global Aluminium (EGA), which confirmed that it has successfully restored approximately 50 percent of operating capacity at its massive Al Taweelah smelting complex. The UAE-based plant, which produced approximately 1.6 million tonnes of primary aluminum in 2025, was forced offline following an Iranian military attack in March, initiating a phased restoration protocol on May 26. EGA disclosed that 631 of the facility's 1,262 electrolytic reduction cells are now fully operational, with the entire facility scheduled to achieve 100 percent nameplate capacity by the first quarter of 2027. The influx of physical supplies hit domestic tickers immediately: Vedanta Aluminium Metal sank 6 percent to an intraday low of ₹336.55, extending its one-month drawdown to 23 percent; state-run NALCO declined 5 percent to touch an intraday low of ₹293, bringing its monthly loss to over 18 percent; and Aditya Birla Group flagship Hindalco Industries slipped 4 percent to ₹852, taking its 30-day retreat past 14 percent.
Global Supply Glut and Chinese Exports: Axis Capital Projects LME Aluminum at $2,800
The accelerated resumption of Middle Eastern smelting operations comes at a time when primary metal valuations are already softening, with international aluminum prices retreating from a 2026 peak of $3,800 per tonne down to around $3,020 per tonne after plumbing year-to-date lows on October 15. The price weakness is further exacerbated by non-West Asian smelting continuity and resilient export volumes from China, where outbound shipments have continued expanding despite Beijing's 30 percent export duty. Citing structural oversupply headwinds, domestic brokerage firm Axis Capital maintained a negative investment outlook on the aluminum space, estimating that global primary supply will comfortably exceed aggregate industrial demand through 2027 and projecting average LME aluminum prices to slip further toward $2,800 per tonne—representing an additional 7 percent downside from current levels. The base metal has underperformed several industrial peers through 2026, registering a 0.25 percent loss year-to-date compared to sharp rallies in copper (+15%) and zinc (+18.5%), while outperforming broader declines across gold (-4%), steel (-1%), iron ore (-15%), and silver (-21.5%).
