Steel Stocks Climb On Report Of Government Mulling Export Duty Cut
Shares of steelmakers gained after a report said the government was considering cutting or abolishing the export duty on key products.
The decision is yet to be taken as the talks on reviewing export duties on steel and iron ore are currently underway, Financial Express reported citing an official aware of the matter.
That pushed up the stocks of most domestic steel mills in Monday's session. The Nifty Metal Index rallied over 2.5%, with 12 of the 15 constituents logging gains.
Last month, top executives of steel companies met Finance Minister Nirmala Sitharaman, and were said to have requested for lowering of the export duty, among others.
The Finance Ministry did not immediately respond to BQ Prime's queries.
Delegation of Indian Steel Association @steel_indian, including Shri @MPNaveenJindal - Chairman JSPL, Shri @sajjanjindal - Chairman JSW, Smt Soma Mondal - Chairman @SAILsteel & other senior members of the industry, calls on Smt @nsitharaman. pic.twitter.com/Txxq7czxsP
June 16, 2022On May 21, India had on levied a 15% export duty on several finished steel products and pig iron to tackle inflation and increase output. The export duty on iron ore fines and lumps were also increased to 58% and 50%.
Several steel manufacturers had expressed concerns, saying the levy has put their expansion plans at risk. Jindal Steel & Power Ltd. had said the levy “would not be competitive” even as it termed the move as “temporary” and expected “things to be normalised” by July.
Analysts, too, had termed the levy as “negative” for the steel sector as they cut FY23-24 EPS estimates for stocks such as JSPL, Hindalco Industries Ltd. and Tata Steel Ltd. ICRA Ltd. in a report said exports could be rendered less attractive as a result of the export duty.
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