Metal stocks shine as govt imposes 12% safeguard duty on steel products; Tata Steel, JSW Steel, SAIL, Hindalco lead

Shares of metal companies rose up to 3% today, in sync with benchmark indices Sensex and Nifty, as sentiments were lifted after the government imposed a 12% safeguard duty on steel imports. The duty came into effect immediately for a period of 200 days — unless revoked.

Boosted by the development, the BSE Metal index rose as much as 1.5% in first hour of trade so far, whereas the equity benchmarks Sensex and Nifty were up 0.35%. The index is down nearly 15% from its Sept’24 peak, while it has rebounded 15% from its fresh 52-week low of 25,884 points touched early this month.

Index heavyweight Tata Steel shares rose as much as 2.6%, while Hindalco Industries , SAIL, NMDC , Adani Enterprises also saw buying, gaining in the range of 1-3%. Among others, Jindal Stainless , JSW Steel , National Aluminium Company (NALCO), Hindustan Zinc , and Vedanta shares were flashing in green zone.

What fuelled surge in metal stocks?

The ministry of finance on Monday announced the imposition of a 12% provisional safeguard duty on certain steel products to protect the domestic industry from global volatility caused by a recent spike in imports of such products. Safeguard duties are temporary measures that a country can impose to protect a specific domestic industry from a surge in imports that are causing or threatening to cause serious injury to that industry.

This move comes in response to concerns within the Indian steel industry that a potential flood of inexpensive steel imports, primarily from China, Japan, and South Korea, could harm their profitability and expansion plans. These concerns have heightened following U.S. President Donald Trump's recent tariff threats, which could make the American market less attractive for Chinese steel, potentially diverting those exports to other markets like India.

According to domestic brokerage YES Securities, Indian metal companies would be navigating a somewhat mixed landscape in Q4 FY25 as Trump tariffs are expected to overshadow the companies’ operational performances.

“Steel producers are benefiting from a seasonal demand uptick, a 12% safeguard duty, and the ease in coking coal prices, which should support an improvement in EBITDA/tone,” it said in a report.

“The Ministry of Finance announced the imposition of a 12% provisional safeguard duty on certain steel products to protect the domestic industry from injury caused by a recent spike in imports of such products. The duty came into effect immediately for a period of 200 days — unless revoked,” said Devarsh Vakil, Head of Prime Research at HDFC Securities.

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