Vedanta's power, steel, oil units crash 8% on commodity rout

Vedanta's iron and steel unit dropped 6% after Chinese steel output data showed a second consecutive monthly decline. India's steel exports to China have been a growth driver for Vedanta's steel business; any slowdown in Chinese demand directly pressures margins, traders said. Chinese mills have cut production amid weak construction activity and steel export restrictions. India's steel ministry has also flagged concerns over global overcapacity.

The power business fell 5%. Power demand in India remains strong. Short-term tariffs on power exchanges have eased. Coal stocks have improved and hydro generation rose. Average spot power prices on the Indian Energy Exchange dropped 10% in the past week, traders said. Vedanta's power purchase agreements with state utilities provide some revenue stability. Spot market exposure remains a risk, and lower merchant power prices could pressure earnings at the unit, traders said.

Vedanta's structure, with each unit listed separately, lets investors trade specific commodity exposures. The simultaneous selloff across all three units suggests a macro-driven move rather than company-specific news, traders said. This pattern often occurs when hedge funds and commodity trading advisers cut risk ahead of key data and policy meetings.

The decline dragged down other commodity-linked names. Hindalco fell 3%, while Tata Steel and JSW Steel each lost 2%. The broader Nifty Metal index closed 2.5% lower, making it the worst-performing sector on the NSE. No corporate announcements were made Monday.