Steel stocks rally: Tata Steel, JSW Steel, Jindal Steel gain 2-4% after safeguard duty lifts sentiment

Steel

Shares of major steelmakers including Tata Steel, JSW Steel and Jindal Steel rose 2-4 percent on Wednesday after the government announced a three-year safeguard duty of up to 12 percent on select steel imports, boosting expectations of better pricing protection for domestic producers.

Tata Steel shares gained 2.2 percent to Rs 179.7 in early trade, while JSW Steel rose 3.3 percent to Rs 1,148.1. Jindal Steel was also higher, rising 3.6 percent to Rs 1,057.8. Jindal Stainless climbed 2.8 percent to Rs 859.7, and NMDC traded marginally in the green at Rs 83.7, up 0.4 percent from the previous close.

The rally extends what has already been a strong year for most steel counters. Tata Steel and NMDC have risen 28.5 percent and 26.5 percent respectively on a year-to-date basis, while JSW Steel has gained 22.6 percent and Jindal Stainless 18.8 percent. These performances comfortably outpace the Nifty 50 index, which is up 9.3 percent so far this year. Jindal Steel has also delivered gains this year, with shares higher by 8.8 percent year-to-date.

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Investor sentiment has improved following the government’s decision to impose a safeguard duty of 12 percent in the first year, 11.5 percent in the second year and 11 percent in the third year on non-alloy and alloy flat steel products. Imports from China, Vietnam and Nepal will fall under the tariff, while specialty steel such as stainless steel remains outside the scope of the measure.

Authorities have maintained that domestic steelmakers should not be adversely affected by low-priced or sub-standard overseas inflows, which have risen in recent periods. The Directorate General of Trade Remedies cited a sharp increase in import volumes causing, and threatening to cause, injury to local industry, leading to the introduction of this multi-year duty structure.

The tariff protection is seen by traders as strengthening the pricing environment for domestic mills by reducing competitive pressure from cheaper imports, particularly in flat steel products that form a significant portion of large producers’ portfolios. With the policy now in effect and sector sentiment buoyant, steel stocks continued to draw investor interest in early trade.

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