Vedanta, Hindalco top stock picks as repricing of reality underway in global metals: Emkay

Emkay Global Financial Services said a broad-based “repricing of reality” is unfolding across global metals, driven by structural supply tightness, elevated cost curves, and growing policy support for resource security. The brokerage believes this marks the onset of a new phase in strategic extraction, led by copper and critical minerals, commodities central to global decarbonisation and electrification agendas.

Copper prices are currently trading near record highs of around $11,000 per tonne, supported by cyclical recovery, supply disruption at Indonesia’s Grasberg mine, and expectations of US Federal Reserve rate cuts. Demand trends, underpinned by data-center expansion and electrification, suggest a sustained supply deficit over the medium term, creating durable price tailwinds. Within this environment, Emkay identified Vedanta Ltd and Hindalco Industries Ltd as its preferred exposures in India’s metals and mining sector.

A cycle born of necessity
Following the global mining capex peak in 2012, years of capital discipline and weak exploration activity have restricted new project development. Emkay noted that the current copper project pipeline meets only about half of expected medium-term demand, while minerals such as lithium, nickel, and rare earth elements face even sharper constraints. The firm sees this scarcity as structural rather than cyclical, driving a repricing of both resources and related equities.

This transition, described as a “synchronized global necessity,” differs from earlier commodity cycles tied to synchronised growth. It is increasingly supported by direct policy intervention—ranging from US and Australian investments in critical mineral projects, to India’s funding commitments under its critical minerals mission, and China’s continued capital deployment in exploration. Emkay expects greater focus on refining and processing capabilities, alongside efforts to diversify supply chains. The brokerage believes that a necessity-driven, policy-backed upcycle offers a more durable investment horizon for miners.

Metals as strategic, undervalued assets
Emkay observed that metals demand has become less sensitive to price fluctuations, with supply-chain security emerging as a priority. The absorption of 50% tariffs on steel and aluminium without significant demand destruction, and the subsequent rise in Midwest premiums, demonstrate this resilience. Similarly, Ford’s reported USD 1 billion profit impact from a disruption at Novelis’s plant underscores the strategic importance of reliable supply.

Against this backdrop, metals are being increasingly viewed as strategic hard assets that remain inexpensive relative to the global money supply—especially amid ongoing monetary expansion and inflationary pressures.

Vedanta and Hindalco: preferred non-ferrous plays
While India offers limited direct exposure to the global critical minerals theme—apart from emerging efforts by companies like Hindustan Copper, NALCO, GMDC, and Midwest—the brokerage sees traditional non-ferrous producers as the most effective proxies for this structural cycle. Emkay highlighted Vedanta and Hindalco as its top picks, supported by strong earnings momentum and leveraged positioning to the ongoing structural upturn in global metals and mining.