NALCO, Hindustan Copper, Vedanta: Metal stocks crash on January 30; NIFTY METAL index plunges 5%. Here is why

All the recent outperformers, such as Hindustan Copper, Vedanta, Hindalco Industries, and NALCO, were trading in the deep red.

Hindustan Copper, which hit a 20% upper circuit on Thursday, crashed as much as 10.5% in today’s session.

According to a report by CNBC-TV18, CME, the financial derivatives exchange based out of Chicago, has revised the margins on copper trades higher by 20%, after prices in the global markets hit a record high.

This could be attributed to a sharp fall in Hindustan Copper stock. Besides, profit booking, too, could be behind the sharp fall in metal stocks, as most metal stocks have gained significantly in the past three to six months, amid a consistent rally in bullion and industrial metals.

Commodities have seen sharp price swings over the past 24 hours, with copper leading the rally. Copper prices have surged this year, rising 42% in 2025 so far, supported by a weaker dollar, strong demand from China, and concerns over a potential supply shortfall amid rising consumption from the energy, data centre, and automobile sectors.

However, some market participants are urging caution.

Why are copper prices rising?

Copper is widely viewed as a barometer of economic health due to its extensive use across power grids, construction, and industrial machinery. Strong demand for these sectors typically signals a healthy and expanding economy, earning the metal its long-standing nickname, “Doctor Copper”.

Rising copper prices generally reflect robust industrial activity and economic growth, while declining prices may point to a slowdown.

Goldman Sachs Research analyst Eoin Dinsmore notes that copper is a key beneficiary of global investment in grid and power infrastructure, as demand from artificial intelligence and defence sectors increases the need for resilient and secure energy networks.

How individual stocks are faring

At the time of writing this article, the NIFTY METAL index was trading 4.52% lower at 11,913.70 levels, with 12 out of 15 constituents trading in the red.

Among individual names, Vedanta was down 7.74% at ₹707 on the NSE, while Hindustan Zinc (HZL) shares were trading 7.72% lower at ₹659.80 apiece on the NSE.

National Aluminium Co Ltd (NALCO) was trading over 8% lower at ₹391.55 on the NSE, and Hindalco Industries was down nearly 6% at ₹963.80.