SAIL, Tata Steel to APL Apollo – Steel stocks rally up to 7% as DGTR recommends 12% safeguard duty to curb imports

Stock market today: Shares of steel companies such as Tata Steel, JSW Steel, NMDC Steel, APL Apollo Tubes and SAIL surged up to 7% on Wednesday, March 19, after the Directorate General of Trade Remedies (DGTR) recommended a 12% safeguard duty on the import of some steel products to curb imports.

NMDC share price gained 7.35% to ₹36.07 apiece while SAIL share price rose 3.54% to ₹112.75. Meanwhile, Tata Steel share price added 2.5% to ₹158.50 and Jindal Steel and Jindal Steel & Power share prices jumped over 1% each. APL Apollo Tubes shares also climbed, gaining 1.7% to ₹1,457.80.

This rise in steel stocks pushed the metal index over 1% higher, making the Nifty Metal pack one of the best-performing sectoral indices on the NSE today.

Safeguard duty on steel products

On Tuesday, the Directorate General of Trade Remedies recommended a 12% temporary tax for 200 days on certain steel product imports in a bid to curb "serious injury" to the domestic industry.

The tax is proposed to be levied on products including hot-rolled coils, steel sheets and plates and cold-rolled coils and sheets.

Domestic flat steel prices have increased 5% in the last month against the weakness in regional prices, led by the widely anticipated safeguard duty, a report by Kotak Institutional Equities (KIE) highlighted.

“A rise in trade action across regions has led to pricing pressure in exporting countries such as China, whereas local prices in importing countries have increased. Export prices in China have declined by 3% CYTD25, whereas domestic HRC prices in India are up 7%. Domestic HRC prices are now at a 7-8% premium on import parity,” said the brokerage. This, as per KIE, leaves little room for further hikes.

According to CLSA's analysis, the temporary tax could lead to a ₹2,100 per tonne rise in prices, a Reuters report quoted as saying.

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