NEW DELHI: Shares of Indian steel companies have risen after a government body recommended a temporary tax on some steel products in a bid to curb cheap imports, raising hopes their earnings might get a boost.
Metal shares rose as much as 1.6% in early trade yesterday. Industry leader JSW Steel and Tata Steel were among the top ten gainers on the benchmark Nifty 50 index, which rose 0.2%.
Shares of JSW Steel and Tata Steel climbed about 3% while those of state-run SAIL advanced 3.5% and Jindal Steel and Power gained 1%.
India launched a probe to determine whether to impose a so-called safeguard duty in December 2024 as record imports into the country forced top steel mills to petition the government.
On Tuesday, India’s Directorate General of Trade Remedies, which functions under the federal trade ministry, 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.
There is scope for raising estimates on steel companies’ earnings as the tax “opens up ample room for imagination around profitability improvement,” analysts at JP Morgan said.
Analysts at CLSA said India’s steel prices had risen recently on expectations of a safeguard duty and added that the temporary tax could lead to a 2,100 rupees per tonne rise in prices. — Reuters
