Aluminium Stock Rally Analyzed

Shares of companies making aluminum, like Hindalco Industries, Vedanta, and National Aluminium Company (Nalco), jumped significantly on Friday. These stocks climbed up to 5% in trading, even though the overall market was a little down. This was mainly because of good news about Alcoa, a major aluminum company.

Key Points

• Alcoa’s Q4 2025 results showed a strong 15% revenue increase.
• Alcoa’s profit jumped significantly due to higher aluminum prices.
• US tariffs and European CBAM are keeping aluminum prices high.
• Novelis, Hindalco’s subsidiary, benefits from higher prices despite slower car sales.
• LME aluminum prices are expected to rise further in 2026.
• China’s production challenges are supporting aluminum prices worldwide.

Alcoa, a leading aluminum producer, announced strong results for the fourth quarter of 2025 (Q4CY25). Their sales were between $3.4 billion and $3.45 billion, which is 15% more than the previous quarter. Their profits also went up sharply to $546 million, compared to $276 million before.

This increase was thanks to aluminum prices going up, better prices for aluminum sold in different regions, and lower costs for the material they use to make aluminum. Alcoa expects the price of aluminum on the London Metal Exchange (LME) to increase in 2026. This is because there isn’t enough aluminum being made in the US, Europe, and China.

The US government has rules that make aluminum more expensive, and Europe has rules that do the same. These rules keep the price of aluminum high. Alcoa spends about $1 billion a year paying these extra taxes, but they sell aluminum for more than that, so it’s actually profitable for them. This helps Hindalco, which has a company in the United States called Novelis.

Another important factor is that analysts at Elara Capital noticed that aluminum prices have continued to rise in January. This is because there’s less aluminum being stored and because it’s becoming more expensive to make aluminum in China. China has limited power to protect the environment and is facing difficulties in making aluminum.

Even though things were a little flat in terms of how much aluminum was sold, the prices were still higher. This meant that Hindalco’s company in the US, Novelis, was able to sell more aluminum and make more money. Nalco is expected to perform steadily, with aluminum sales prices covering costs despite lower aluminum prices.

“Strong aluminum prices create opportunities for companies involved in the industry.”