Shares of Indian metal companies, particularly Tata Steel, JSW Steel, and Hindalco, saw a strong rally in early trade on Monday following news that the Directorate General of Trade and Remedies (DGTR) had launched an investigation into the steel industry’s request for a 25% safeguard duty on steel imports.
The probe
The investigation follows a complaint filed by the Indian Steel Association (ISA), which represents its members—including ArcelorMittal Nippon Steel India, AMNS Khopoli, JSW Steel, JSW Steel Coated Products, Bhushan Power & Steel, Jindal Steel and Power, and the Steel Authority of India (SAIL).
The complaint was made under the Customs Tariff Act of 1975, urging the DGTR to investigate the rising imports of steel and consider imposing a safeguard duty.
The investigation will assess whether an unexpected surge in steel imports has occurred and whether such imports have caused or pose a serious threat of injury to the domestic steel industry.
The period under scrutiny will cover imports from October 2023 to September 2024, with the authority also reviewing data from 2021 to 2024.
The safeguard duty, a temporary tax, is designed to protect domestic industries from a sharp rise in imports.
In this case, the investigation will consider whether increased imports, particularly from countries with surplus steel capacity like China, Japan, and South Korea, have resulted from slowing demand in those markets.
Following the investigation, the DGTR can propose the imposition of the duty to the Board of Safeguard, and the final decision will rest with the finance ministry, based on recommendations from the Ministry of Commerce.
Steel stocks in the green
- Hindalco’s share price rose 1.81% to reach ₹633.90 in early trade on Monday.
- Jindal Stainless Ltd. shares gained 0.47% to trade at ₹723.20.
- Jindal Steel and Power shares jumped 3.29% to reach ₹937.95.
- JSW Steel shares climbed 3.26% to trade at ₹947.25.
- Steel Authority of India shares surged 3.73% to reach ₹120.43.
- Tata Steel Ltd. shares gained 1.98% to reach ₹143.46.
- Vedanta Ltd. shares rose 0.56% to reach ₹479.90.
The Nifty Metal index rose over 1.5%, making it one of top-performing sectors on Monday.
Broader market recovery in India
India’s benchmark indices, Sensex and Nifty, kicked off the new week in the green after suffering major losses last week.
The recovery comes after a volatile week where the indices recorded their steepest decline since June 2022. The Nifty dropped 10% from its record highs, entering a technical correction.
At the time of writing, the Sensex had gained 630 points, or 0.81%, reaching 78,671.75, while the Nifty was up 199.50 points, or 0.85%, at 23,787.
The optimism was driven by the US Federal Reserve’s preferred inflation measure, which indicated a slower-than-expected rise in consumer prices, raising hopes for additional rate cuts in 2025.
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