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Shares of major metal companies, including Tata Steel, JSW Steel, Hindalco, and Hindustan Zinc, declined by up to 2% on April 9, following a steep 1.5% drop in the Nifty Metal index. The fall came in the wake of US President Donald Trump’s announcement of a 104% tariff on Chinese goods, intensifying trade tensions between the world’s two largest economies. This escalation, driven by a tit-for-tat exchange of tariffs, has sparked fears of a global economic slowdown, further weighing on metal prices.
The Nifty Metal index has slumped 11% over the past four trading sessions, with stocks like Tata Steel, JSW Steel, SAIL, and NALCO witnessing losses of up to 15%. The tariff hike marks a dramatic shift from the previous US rate of 10% on Chinese imports, which surged to 44% last month after Trump imposed “reciprocal tariffs”—a 34% additional levy on Chinese goods and a 10% base tariff on imports from all other nations. Following China’s retaliatory 34% tariff on US goods, the US responded with an additional 50% tariff, pushing the total burden on Chinese imports to an unprecedented 104%.
China, the world’s second-largest economy and a key player in the global base metals market, now faces heightened concerns over its post-pandemic recovery. Experts warn that this trade war could disrupt global supply chains, elevate inflation, and dampen demand, all of which could exacerbate downward pressure on metal prices. “The rising tariffs increase the risk of supply chain bottlenecks and a broader slowdown in global economic activity, directly impacting commodity markets,” said analysts at Prabhudas Lilladher. “Investors should closely watch the pace of the global slowdown, domestic demand resilience, and inflationary pressures from supply chain disruptions.”
The US and China together account for roughly 45% of global GDP, making the fallout from this conflict a critical concern for industries worldwide, particularly metals. As trade flows falter, market participants remain cautious about the near-term outlook for metal stocks.
Disclaimer
The views and insights expressed by analysts and experts in this article are their own and do not necessarily reflect the opinions of Procapitas or its management. Procapitas recommends that readers consult certified financial advisors or experts before making any investment decisions based on this information. Market conditions are subject to change, and past performance is not indicative of future results.
