Tata Steel, JSW Steel other steelmakers' shares jump up to 3% as safeguard duty decision clears overhang

India’s top steelmakers, including Tata Steel, JSW Steel, SAIL and JSPL, surged up to 3% on Monday after the Directorate General of Trade Remedies (DGTR) recommended a final safeguard duty on steel imports for three years, a move expected to ease a key overhang for the sector and support domestic producers.

The stocks within the sector witnessed notable gains in today’s session, with SAIL leading the pack after surging 2.8% to a high of Rs 123.80. JSW Steel climbed 2.7% to Rs 1,073.50, while Jindal Steel & Power advanced 2.55% to Rs 1,000. Meanwhile, sector major Tata Steel rose 2% to a high of Rs 158.60.

The trade remedies authority has proposed a levy of 12% in the first year, 11.5% in the second, and 11% in the third year, following a complaint filed by the Indian Steel Association. The recommendation comes just weeks before the current 12% provisional safeguard duty, imposed in April for 200 days, was set to expire in September.

DGTR findings and recommendations

“There is a recent, sudden, sharp and significant increase in imports of PUC (product under consideration) into India at the cumulative level as a result of unforeseen developments...and threatens to cause serious injury to the domestic industry/producers,” the DGTR said in its notification dated August 16.

The body recommended that no safeguard duty be applied if import prices are equal to or above specified thresholds, $675 per tonne for hot-rolled coils and sheets, $695 per tonne for hot-rolled mill plates, $824 per tonne for cold-rolled coils and sheets, $964 per tonne for colour-coated steel products, and $961 per tonne for metallic-coated steel coils.

The final call on imposing these duties rests with the finance ministry.

The recommendation, viewed as a positive development by market participants, addresses long-standing concerns about the fate of the safeguard duty once the current levy lapses next month. Market experts note that domestic ferrous stocks like Tata Steel, JSW Steel, SAIL and JSPL stand to benefit directly, while companies such as NMDC, APL Apollo and other downstream pipe makers could also see indirect gains.

China, Korea, Japan, Vietnam and Nepal remain the top exporters of the affected steel products to India.

The Nifty Metal index has declined 2% over the past month. Tata Steel and SAIL shares have fallen between 3% and 10%, while JSPL has gained 4.5%. JSW Steel and NMDC shares have been largely flat over the same period.

Also read | Trade dept suggests final safeguard duty on some flat steel imports for 3 yrs

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