Steel stocks jump on import duty hike cue

KOLKATA: Steel sector stocks on Wednesday surged on reports that the government has hiked import duty on steel 7.5% to 10%. The move meets a long standing demand from domestic steel companies reeling under a flood of cheaper steel imports from China and South East Asia. It comes on top of a recent hike in duty on stainless steel imports and brought much needed cheer to steel scrips.

At 2 pm on Wednesday, JSW Steel stock had jumped 4.13% to Rs 874 on the BSE, Tata Steel scrip had surged 4.94% to Rs 309. The SAIL scrip had gained 4.08% to move up to Rs 62.50, while JSPL stock went up 3.31% to Rs 98.35 on the exchange.

Steel ministry sources confirmed the move. While a n official notification is on its way, the industry too lauded it. “It is a welcome step. However, I need to go through a copy of the government notification before I can comment on it,” Sanak Mishra, secretary general of Indian Steel Alliance said. The industry body is a grouping of top public and private steel producers spearheading the industry’s demand for a duty hike.

Domestic steelmakers who are reeling under the impact of slow demand and threat of imports have been clamoring for an import duty hike in the wake of a 71% jump in imports between April 2014 and March 2015. Imports maintained a similar trend in April and May 2015 too.

Earlier this month, a group of top steel honchos including JSW Steel chief Sajjan Jindal, Tata Steel MD TV Narendran, SAIL chairman C S Verma, Essar Steel chairman Shashi Ruia Jindal Steel and Power Limited’s Naveen Jindal met finance minister Arun Jaitley. Steel minister Narendra Singh Tomar also attended the meeting. The grouping, Indian Steel Allliance apprised the FM of the problems being faced by the industry. “We have been in dialogue with the government and were hopeful they will take some mitigating measures in case of carbon steel too,” Mishra had told ET last week. Since September–October last year, imports have gone up to almost on 1 mt per month. Steel imports jumped 71% between April 2014 and March 2015 to over nine million tonne (mt). Out of this, China accounted for around 2.9 mt. Against this, Chinese imports had amounted to 1.08 mt in 2013-14 when total steel imports touched 5.45 mt.