The government has deferred a decision on a proposal to impose provisional safeguard duty on Hot Rolled Coils, Sheets/Strips.
It needs to examine the matter further after taking views of the end user industry and then decide on the matter within 60 days.
According to steel secretary there is no urgency to consider the safeguard duty. Since the Indian prices are already trading at premium to the landed cost, there is not much threat to the steel industry, according to the steel ministry.
However, there has been a significant increase in imports over the last couple of months at low prices. This has impacted the domestic prices, which fell about 40% from the peak during July-August 2008.
We believe that the safeguard duty, if at all imposed by the government, would be positive for steel industry as it will protect steel companies from the cheap imports and any further fall in the prices. We remain NEUTRAL on the sector.