2026 Metal Sector Outlook: How GST 2.0, Commodity Demand, Green Energy Boost May Fuel Upmove in Metal Firms

2026 Metal Sector Outlook: Stronger base metal prices and robust industrial demand, especially from the renewable energy segment, supported the growth of metals and mining companies in 2025. A favourable commodity price environment, consumption boost, implementation of Goods and Services Tax 2.0 (GST 2.0), and other supportive factors are expected to continue fuelling growth prospects for the sector in 2026.

However, global demand, geopolitical tensions, currency fluctuation, growth outlook, price volatility, stringent environmental regulations, dumping measures from China, etc can impact the growth outlook for metal companies.

Metal Companies Poised to Cash In on Strong Commodity Prices

Metal commodities such as silver, aluminium, zinc, copper and lead are set to end 2025 on a strong note, posting significant price gains. "The surge in base metal prices has been driven by strong industrial demand from the renewable energy and AI sectors, US Fed rate cuts, and expectations of fiscal stimulus in China," explained Rajani Sinha, Chief Economist, CareEdge Ratings.

The surge in these metal prices translated into significant gains for metal and mining companies during the September quarter of the financial year 2025-26. In addition, several firms are planning capacity expansions to maximise the benefits of elevated commodity prices.

"We see zinc remaining in a resilient trading band, lead continuing to be underpinned by battery and industrial demand and silver potentially sustaining further gains, all of which could drive incremental margin expansion in the coming quarters," stated Hindustan Zinc CEO Arun Mishra.

Advance in Capex, Integration of Renewable Energy

Companies are also realigning their growth strategy and capacity expenditure plans to meet the industry requirements and benefit from market dynamics. "We are advancing capacity expansion across smelting and refining, strengthening downstream and value-added product offerings, and integrating renewable energy at scale to enhance cost competitiveness and energy security. Scaling value-added products and sustainable solutions remains a key priority as demand increasingly shifts towards high-performance and low-carbon aluminium," Rajiv Kumar, CEO, Vedanta Aluminium, told GoodReturns.

Shift In Focus Due To Tremendous Silver Rally

Vedanta Aluminium's sister company, Hindustan Zinc, plans to divert its resources to silver production in 2025 to maximise benefits from rising silver prices. Silver rates have surged more than 170% in 2025.

"We have diverted resources from other mines to SK Mine and also we have incentivized the contractors and workmen who are working there, to ensure that we attack those stopes with high silver quantity and produce them in H2 so that we get the maximum advantage of silver till the time the prices are high," stated Hindustan Zinc CEO Arun Misra in September Earnings call. Hindustan Zinc's Sindesar Khurd (SK) mine in Rajasthan is one of the world's leading silver producers.

Anti-Dumping Duty on Chinese Steel To Help Domestic Steel Manufacturers

The Indian government's recent decision to impose an anti-dumping duty on imports of certain steel products from China for a period of five years is expected to provide much-needed relief to domestic steel manufacturers. The move will allow local players to operate with greater visibility and focus on improving operational performance, according to Chandragupt Prakash Mangal, Managing Director of Mangalam Worldwide Limited.

Commenting further on the outlook for business amid evolving trade conditions and fluctuations in international benchmark prices, Chandragupt Prakash Mangal said, "Over the next 12 months, the business landscape is expected to reflect a degree of uncertainty driven by changes in international benchmark prices, movements in alloying element costs, and periodic adjustments in trade conditions."

Booming Renewable Energy, Industrial Growth To Boost Demand

Favourable factors like a surge in consumption, expansion of solar and other renewable energy, and domestic growth will continue to fuel the demand for metals.
"Stainless steel consumption is likely to be supported by sectors where durability, corrosion resistance, and lifecycle performance are critical considerations.

Areas such as renewable energy installations, process-driven industries, transportation systems, and engineered equipment continue to expand their use of specialised stainless steel grades. This pattern of demand, centred on functional performance rather than volume, is expected to provide consistency over the coming year, allowing manufacturers to balance near-term variability with steady end-user requirements," Mangal told GoodReturns.

"Aluminium's role as a strategic metal is firmly embedded in India's growth narrative, which envisages aluminium's domestic demand rising nearly six-fold to about 37 million tonnes by 2047. This long-term visibility, combined with assured resource availability, rapid technology adoption and a growing preference for value-added and sustainable products, creates a compelling opportunity for the industry," stated Rajiv Kumar.