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Decline in base and precious metal prices to ease demand and margin concerns for Auto, Real estate and Jewellery segment

ICICIdirect Research 26 Jun 2026 DISCLAIMER

Global metal prices have witnessed significant volatility over the past four months, primarily driven by the US-Iran conflict.
During this period, the Nifty Metal Index reached its highest level on 1 June'26, delivering a return of 12% from pre-war levels (vs. a 7% decline in the Nifty Index). However, following the announcement of the US-Iran interim peace deal on 15 June'26, the Nifty Metal Index subsequently declined by ~5% (vs. flat Nifty) broadly tracking correction in global metal prices.
Supply disruption concerns in West Asia, which accounts for ~9% of global aluminium production, pushed LME aluminium prices sharply higher, touching a multi-year high of ~US$3,800/tonne on 1st June’26. However, following the announcement of interim peace agreement, LME aluminium prices have reverted back to pre-conflict levels of ~US$3,100/tonne,.
LME zinc and copper prices have also corrected and are now trading close to pre-conflict levels at ~$3,400/ton and ~$13,000/ton, respectively.
Despite the recent correction, inventories, particularly for aluminium & zinc, continue to decline, indicating a tight physical market and suggesting limited downside.
HRC prices have also softened marginally by ~₹1,700/tonne from the peak of ~₹58,500/tonne recorded in May’26.
Moreover, following the US-Iran peace deal, we expect a subsequent decline in raw material prices, such as energy and coal costs, which would cushion the impact of lower realizations, thereby supporting the profitability of domestic metal companies. For ex: Iron ore is down ~7% in last fortnight & currently quoting at ~US$ 93/tonne vs. the near term high of US$ 106/tonne.  
Among precious metals, gold prices have corrected by 12% from its high to Rs1,41,500 pe 10gm and is now expected to revive drive jewellery consumption
This will encourage jewellery buyers to get back in buying mode in the coming months. We should expect jewellery products to gain traction in the backdrop of strong wedding season and prior to upcoming festive season (Q3FY27).
Within base metals, we continue to be positive on ferrous space with top bet as Tata Steel with SoTP based target price of ₹ 270 (Rating: BUY). 
In jewellery space, preference is towards companies such as Titan and Bluestone Jewellery. We have Buy on Titan with PT of Rs4,980 and Bluestone Jewellery and Lifestyle with PT of Rs645.

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