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ICRA raises domestic non-ferrous metal sector outlook to positive amid strong pricing environment
Sep-16-2026

Citing stronger pricing conditions, healthy domestic demand and improved earnings visibility, the rating agency, ICRA in its latest report has revised its outlook for the domestic primary non-ferrous metal industry to Positive from Stable. It said global supply disruptions and low inventories have pushed non-ferrous metal prices up by 30-40% in the first five months of FY27. If the favourable pricing environment persists, the sector could see operating margins rise by around 400 bps to around 35%.

It said while global demand growth remains subdued for non-ferrous metals, the supply side constraints are likely to support market balances. The aluminium market is projected to remain in a deficit of around 1 million metric tonne (MT), considering continued supply disruptions in West Asia. Restoration of disrupted facilities is expected to remain gradual, supporting elevated aluminium prices through 2026-27. The refined copper market is also anticipated to tighten, owing to movement of inventories to COMEX warehouses amid uncertainty over US tariffs, thereby reducing refined copper availability outside the US market. Similarly, refined zinc supply is expected to remain constrained by weaker mine production and declining ore grades, with global mine output contracting by around 0.5% in 5 months of CY2026.

ICRA expects domestic demand for base metals, including aluminium, copper and zinc, to grow by 8-9% in 2026-27. Nevertheless, domestic production of aluminium and zinc continues to exceed consumption. The situation is likely to persist going forward as domestic capacity is elevated and manufacturers are expected to maintain high utilisation level for the plants. This, in turn, would lead to large export volumes. Encouragingly, off-take risks in the international market would remain low, given the cost competitiveness of the domestic manufacturers. In contrast, lower copper production has created a large deficit in the domestic copper market, resulting in large imports, and the situation is unlikely to improve in the near term.
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