The shares of metal companies posted strong losses on April 3 following US President Trump's reciprocal tariffs on concerns over global demand growth and the potential disruption to business activities across the globe.
A factsheet released by the White House showed that steel, aluminum and other articles will be exempt from the reciprocal tariffs, as the Trump administration has already imposed 25 percent tariffs on them. The exemptions include copper, on which Trump is expected to announce tariffs in the near future.
Industry experts, concerned over the impact tariffs on global demand, also fear the uncertainty over potential counter-measures by China and the European Union, sparking worries over an extended trade spat.
Kotak Mahindra AMC MD Nilesh Shah has warned against the increase dumping of cheap Chinese exports after US reciprocal tariffs, hurting the domestic players. "We should negotiate hard with China to create a win-win situation rather than the usual lose-lose situation," Shah said.
The fall in the metal stocks pushed the Nifty Metal index down nearly a percent to close at 9,005 on April 3. This is the lowest closing level for the index in the last 12 consecutive sessions.
Amar Ambani, Executive Director at Yes Securities said India runs the risk of dumping of steel products into the country after the tariff imposition. "The existing 25 percent US tariff on steel and aluminum remains unchanged, boosting US domestic prices. However, exporters from Vietnam, Japan, and South Korea are pivoting to India and the Middle East, exacerbating India’s challenge with cheap steel imports... No tariffs have hit copper yet, but US reviews of import impacts signal potential 25% duties ahead. Such a move could reshape trade flows and pressure copper-exporting nations," said Amar Ambani.
Vedanta was the top loser on the index, crashing nearly 4 percent, whiel Hindalco and JSW Steel shares fell over a percent each. Tata Steel, Jindal Steel & Power, Hindustan Copper and National Aluminium shares too closed nearly a percent lower, while Steel Authority of India (SAIL) ended with marginal losses.
Bucking the trend, Adani Enterprises and Welspun Corp shares rose over a percent, while Jindal Stainless Steel, NMDC and APL Apollo Tubes shares too closed in the green.
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