ICRA’s outlook for the non-ferrous metal industry has been revised to Positive, backed by expectations of robust earnings growth amid elevated metal prices and a healthy 8-10% domestic demand growth for base metals in FY2027. The operating margins for ICRA’s sample are expected to improve by ~400 bps to about 35% in FY2027,strengthening the sector’s overall credit profile. International base metal prices are expected to increase by 10-18% in FY2027 owing to supply-side constraints. Aluminium prices are being supported by persistent supply disruptions in West Asia, while copper prices benefitted from higher US inventory amid tariff-related uncertainty over refined copper. Zinc prices have also witnessed a sharp increase. The base metal prices improved sequentially by 35-40% in 5M FY2027.

• The global aluminium market is expected to remain in a deficit of around 1 million MT (mt) in FY2027 as West Asia, which accounts for ~9% of the global supply, faces facility damages and gas-linked productions cuts.
  
• The global refined copper market is expected to tighten in FY2027 as mine-level disruptions persist, constraining supply.