Mumbai: Steel companies gained for the third consecutive session on Monday on hopes that the floor price set for importing the commodity into India will check the surge in imports and help local companies.

Shares of JSW Steel Ltd rose 0.99%, Tata Steel Ltd 0.19%, Bhushan Steel Ltd 6.18% and Uttam Galva gained 4.64%.

The BSE Metal index fell 0.85% to 6,839.94 points, while the benchmark Sensex index shed 1.34% to 24,287.42 points.

Since 21 January, BSE Metal index has gained 7.11%. The index gained in 7 out of 11 trading sessions. In 2015, it fell 31.2%.

Minimum prices for inbound shipments are in the range of $341-752 per tonne across various grades of steel, according to a notification put out by the Directorate General of Foreign Trade on Friday. The minimum price will be applicable to 173 steel products.

Steel imports to India have surged in the last 12 months. According to data available with the joint plant committee of the steel ministry, in the April 2015 to January 2016 period, imports rose 24.1% and India’s steel consumption grew 4.2%.

“Price recovery will be a gradual process. The duty is for six months, there will be a lag of those products which have been already billed for landing in the country. Also, by the end of the fifth month of the six-month period, buyers will wait for the minimum import price to go out before placing fresh orders," said Ravi Uppal, managing director and group chief executive officer, Jindal Steel and Power Ltd. Uppal also added a word of caution to watch out for any fluctuations in the Chinese currency.

The floor prices, which would make hot-rolled coils from overseas 19% more expensive than the locally-made product, will be valid for six months. Imports into India surged 29% to 8.39 million tonnes in the nine months to December, according to the steel ministry.

The move is likely to help steel companies. Welspun Corp Ltd said in a notice to BSE that the move “will have beneficial effects on our India business due our backward integration into manufacturing of plates and coils besides our presence across large parts of pipe business value chain".

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