Steel stocks are rising today, 19 March 2025, after the Directorate General of Trade Remedies (DGTR) announced the imposition of a 12% provisional safeguard duty on steel products for 200 days. This announcement has come as a big relief for the domestic steel manufacturers which has been rejoiced by the market.
Safeguard Duty and Why?
It has been observed that there is a sudden rise in the imports of steel products in India. This can adversely impact the domestic steel manufacturers and suppliers and thus DGTR has recommended the imposition of the safeguard duty. It will be imposed at the rate of 12% for 200 days on the price of the products which includes both alloy and non-alloy steel flat products –
- Hot rolled coils, sheets, plates
- HR plate Mills plates
- Metallic Coated Steel coils & sheets – profiled as well as non-profiled
- Cold rolled coils and sheets
- Color-coated coils and sheets – profiled and non-profiled.
DGTR has recommended this safeguard duty, but it is yet to be approved by the Finance Ministry to come into effect.
Two sides of the coin
While the big players in the steel industry were anticipating a higher rate of tariff to be imposed, the small-scale steel companies are a bit averse to the safeguard duty as they think, that if the same is higher, then it can make the input cost also go up significantly which can be challenge for the small players in the industry. While they may not agree upon the safeguard duty rate, all the steel companies want the duty to be imposed for sure. Especially when the Chinese players are dumping their cheap steel into the Indian market.
Apart, the Trump government has also imposed a 25% tariff on steel and aluminum imports from India, which has made it more challenging for Indian steel makers to export to the US. This is another reason why the Indian Steel Association (ISA) has been trying to discuss the necessity of imposing safeguard duty on steel prices since December. This association represents the steel giants such as Tata Steel, JSW Steel, and others in the country.
On top of that, Indian steel manufacturers also need to control the manufacturing risk that can evolve from the tariff-related actions by the US. Any increase in the US tariffs will directly hurt the exports of Indian steel manufacturers.
Sector-wide and Stock-Specific Rally
The Nifty Metal index has gained close to 1.25% at around 1 p.m. today driven by steel stocks such as Tata Steel, SAIL, JSW Steel, and others which all gained up to 4%. Tata Steel shares gained above 2.5% until now and trading at ₹150.5 apiece. On the other hand, JSW Steel gained around 1.18% until 1 p.m. and trading around ₹1030.10 per share. SAIL has been gaining the most in today’s market. It has already surged 3.94% and currently trading at ₹113.10 per share.
Other metal stocks also witnessing gains today amongst which Welspun Corp gained significantly around 2% and above. Jindal Steel & Power increased up to 1% as of now, and Adani Enterprise gained close to 1%. Coming to the small-caps steel stocks, NMDC massively rallied gaining more than 7% and trading around ₹36 per piece.
Wrapping up
While the DGTR has already proposed the safeguard duty, it is now upon the Finance Ministry to approve the same or reject it. However, the steel prices are soaring higher as they anticipate the ministry to approve the proposal, and safeguard the domestic steel manufacturers.
Source: MoneyControl
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