Metal stocks on surge, Jindal Steel, SAIL, JSW Steel, NALCO rallied up to 4%

Shares of metal companies experienced high demand on Monday, rising by up to 4 percent on the NSE after the Directorate General of Trade Remedies (DGTR) acknowledged the steel industry’s request for a 25 percent safeguard duty on imports and initiated an investigation. The Nifty Metal index was one of the top-gaining sectors, increasing by as much as 1.65 percent during intraday trading. 

Individually, Jindal Steel and Power saw a gain of 4.3 percent, reaching Rs 947.50, while the Steel Authority of India rose by 3.4 percent to Rs 120.08. JSW Steel surged by 3.3 percent, reaching Rs 947.95, and National Aluminium advanced by 2.2 percent to Rs 220.30 per share during intraday trading. Other companies, including Tata Steel, Hindalco, Vedanta, and Adani Enterprises, also experienced increases of around 1 percent each in Monday’s trading session.

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Metal stocks picked up pace as the DGTR, under the Ministry of Commerce, initiated an investigation into imports of 'Non-Alloy and Alloy Steel Flat Products,' which are used across various industries such as fabrication, pipe making, construction, capital goods, automobiles, tractors, bicycles, and electrical panels. 

The investigation follows a complaint filed by the Indian Steel Association, representing its members—ArcelorMittal Nippon Steel India, AMNS Khopoli, JSW Steel, JSW Steel Coated Products, Bhushan Power & Steel, Jindal Steel and Power, and the Steel Authority of India—under the Customs Tariff Act of 1975. 

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DGTR said that the applicants have raised concerns about a "recent, sudden, sharp, and significant" surge in the volume of imports, which they claim has caused "significant" harm to the domestic industry. They are seeking the imposition of safeguard duties to shield the domestic producers of similar or directly competitive products from further injury. 

The DGTR's probe will review import data from October 2023 to September 2024 and examine relevant data from 2021 to 2024. Analysts believe that the government’s decision to initiate a duty investigation is a prudent step, considering the finished steel imports have surged to an 8-year high of 6.5 million tons (MT), up by percent 27 percent Y-o-Y in the period between April’ to November.

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