Brokerage firm Kotak Institutional Equities, in its note on the aluminium sector, said the recent euphoria in prices has moderated, although underlying fundamentals remain intact.LME aluminium prices have softened 7% from recent highs to $3,030 per tonne, but are still 20% higher than the FY2025 average.
The brokerage attributed the recent weakness to expectations of fewer rate cuts by the US Federal Reserve, a stronger dollar, and the broader sell-off in silver, gold and copper prices.
Despite the correction, Kotak said aluminium fundamentals remain strong, driven by structurally rising demand, lagging capacity additions and intermittent supply disruptions, which together are resulting in a structural deficit in the market.It expects aluminium prices to remain well above cost support levels for an extended period and has forecast prices of $2,900 per tonne for FY2027 and FY2028E, which is about 5% below current spot levels.Among stocks, Kotak said Vedanta Ltd. is best placed to benefit and remains its top ‘Buy’.The brokerage has a price target of ₹890 on the stock, implying an upside of nearly 32% from current levels.Shares of Vedanta ended 1.32% higher at ₹677 on Wednesday. The stock is up over 12% so far in 2026.
