Steel stocks rally: Shares of major ferrous metal companies like Tata Steel, JSW Steel, SAIL, and JSPL saw gains of up to 2 per cent on Monday, August 18, following news around a potential final safeguard duty on steel imports. These names are seen as direct beneficiaries of the move, while companies like NMDC, APL Apollo, and other pipe makers may also benefit indirectly.
That said, the broader Nifty Metal index has slipped about 2 per cent over the past month. Tata Steel and SAIL have dropped between 3 per cent and 10 per cent, while JSPL has gained 4.5 per cent. JSW Steel and NMDC have remained largely unchanged during this period.
The Directorate General of Trade Remedies (DGTR) has recommended imposing a safeguard duty on certain flat steel imports for the next three years, aiming to shield the domestic steel industry from a surge in low-cost overseas shipments.
According to the proposal, the safeguard duty will be levied in a phased manner:
12 per cent in Year 1,
11.5 per cent in Year 2, and
11 per cent in Year 3.
The duty will apply to key flat steel products such as hot-rolled, cold-rolled, and coated steel, which are extensively used in sectors like automotive, construction, and consumer appliances.
The move comes amid growing concerns that rising imports have been hurting Indian steel manufacturers, including major players like Tata Steel, JSW Steel, and SAIL. These companies are likely to benefit if the duty is implemented.
However, the proposed duty may increase input costs for downstream industries such as automobiles, real estate, and white goods, which rely heavily on flat steel as a raw material.
The DGTR’s recommendation is currently under review and could be accepted or modified by the Ministry of Finance. If implemented, the move is expected to offer a buffer to Indian producers while potentially impacting pricing and margins for steel-consuming sectors.
