Gujarat Mineral Development Corporation (GMDC) and National Aluminium Company (NALCO) shares experienced notable gains on January 12, 2026, following positive remarks from US Ambassador Sergio Gor about India's potential participation in the US-led Pax Silica Alliance. The announcement boosted investor sentiment around India's expanding role in global technology and critical mineral supply chains.

Stock Performance Overview

Both PSU companies rebounded from their day's lows, with strong closing performances that reflected market optimism about the strategic alliance opportunity.

Understanding the Pax Silica Alliance

The Pax Silica Alliance represents a multilateral initiative launched in 2025 designed to strengthen secure supply chains across critical technology sectors. The alliance focuses on silicon, semiconductors, artificial intelligence, critical minerals, and digital infrastructure, aiming to reduce global dependence on concentrated manufacturing hubs through enhanced cooperation among trusted, technology-focused economies.

While India was not among the founding members, ongoing discussions with New Delhi indicate potential future participation. The current alliance membership includes:

• Japan
• South Korea
• Singapore
• Netherlands
• United Kingdom
• Israel
• United Arab Emirates
• Australia

These countries bring strong capabilities in advanced manufacturing, technology development, and strategic supply chain management.

Official Perspectives on India's Role

Senior officials from alliance member countries have consistently highlighted India's growing importance in global technology supply chains. US officials have positioned India as a key partner for diversifying electronics and semiconductor manufacturing capabilities. Japan has emphasized opportunities for deeper semiconductor supply chain cooperation with India under existing Indo-Pacific frameworks, while Israeli leaders have recognized India's robust technology talent pool and innovation ecosystem as valuable areas for strategic collaboration.

Business Impact for GMDC and NALCO

Both companies are strategically positioned to benefit from the alliance's focus on securing critical supply chains for advanced technology applications.

The alliance's objective to diversify supply chains away from concentrated hubs positions India as a trusted alternative source, potentially leading to stronger export opportunities, enhanced policy support, and increased foreign investment for Indian mining and metal companies.

Company Profiles

GMDC operates as a state-owned mining company based in Gujarat, specializing in the exploration and production of critical minerals including bauxite, lignite, and fluorspar. The company plays a vital role in supplying raw materials for India's aluminum and energy sectors, making it strategically important for critical mineral supply chains.

NALCO functions as a leading Indian public sector enterprise covering the aluminum and power sectors. The company's operations span bauxite mining, alumina refining, and aluminum production, supplying both domestic industries and export markets while contributing significantly to India's position in global critical mineral and metal supply chains.

The Nifty Metal Index experienced a sharp decline on Thursday as profit booking and global commodity rebalancing triggered a correction following a strong rally. The selloff affected the entire metals sector, with all 15 constituents of the index trading in negative territory, making it the top sectoral laggard for the session.

Expert Analysis Points to Tactical Correction

Aditya Welekar, AVP at Axis Securities, attributed the decline to multiple factors affecting the metals sector. According to Welekar, metal stocks had rallied sharply in recent months with valuations pricing in a near-perfect bull-case scenario. "Any pullback in underlying commodity prices was bound to lead to a correction in stock prices," he explained.

The correction was further amplified by recent rebalancing in global commodity indices, including gold and silver, which led to technical corrections across commodities and spillover volatility in metal stocks.

Federal Reserve Outlook Adds Pressure

Uncertainty around US Federal Reserve rate cuts emerged as another key factor weighing on metals. Strong US services data and mixed labour market signals have sparked debate over the timing and quantum of rate cuts. "If the US labour market remains strong, the Fed may not feel urgency to cut rates, which could be negative for commodities," Welekar noted.

Valuation Concerns Despite Strong Fundamentals

Welekar highlighted that many metal stocks were trading at elevated levels, with aluminium stocks particularly stretched. The sector dynamics show:

"To sustain these valuations, commodity prices need to remain elevated for an extended period. The current correction is more tactical, driven by profit taking," he said, adding that deeper corrections are unlikely unless US labour data surprises sharply on the upside.

Earnings Outlook and Investment Strategy

Looking ahead, Welekar expects muted performance in the near term but sees improvement beyond the current quarter. He anticipates that non-ferrous players may face pressure due to company-specific issues, while steel companies may experience subdued spreads leading to modest EBITDA moderation.

However, the fundamental outlook remains supportive. "Supply growth is limited, while demand use cases continue to expand. Any near-term dip in prices can offer a buying opportunity at lower levels," Welekar emphasized.

Market Correction Seen as Entry Point

Welekar believes the sharp fall in metal stocks represents largely a one-off adjustment driven by commodity index rebalancing, though volatility could persist for a few sessions. "If stocks correct further after results, long-term investors can use those dips to accumulate quality metal stocks," he advised.

The expert's analysis suggests that while near-term volatility may continue, the medium-term outlook for the metal sector remains constructive, supported by favourable supply-demand dynamics and improving demand conditions across multiple sectors including construction, electric vehicles, and data centres.