Foreign institutional investors (FIIs) have made a dramatic pivot to India’s metal stocks, pouring ₹11,526 crore into the sector in January even as they dumped nearly every other segment during a brutal ₹35,960-crore monthly selloff, sparking speculation that a commodity super cycle may be taking shape.
The sudden surge in FII buying comes as HSBC’s global metals team warns that a “super cycle” is likely emerging in select metals driven by surging electric vehicle demand, underinvestment in supply, and production disruptions. The bank now expects primary aluminium to swing into deficit in 2026, reversing its earlier surplus forecast, with shortages widening over the next five years.
“HSBC Global Metals team highlights that a combination of 1) strong demand in sectors like EVs and ESS; 2) lack of investments in recent years driving deceleration in supply growth; and 3) other supply issues (caps, disruptions) are likely to drive a ‘super cycle’ in select metals,” the bank said, forecasting LME aluminium prices at $3,200 per tonne in 2026, rising to $3,300 by 2030, 15-16% above Bloomberg consensus.
NSDL data reveals the stark divergence in FII flows for January: metals attracted ₹11,526 crore while capital goods drew ₹2,761 crore. Every other major sector saw heavy selling—financials hemorrhaged ₹8,592 crore, FMCG bled ₹7,497 crore, healthcare lost ₹6,162 crore, consumer services shed ₹5,513 crore, telecom dropped ₹4,777 crore, auto fell ₹3,594 crore, and realty declined ₹2,655 crore.
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