DGTR Initiates Probe on Steel Safeguard Duty; Shares of Metal Companies Rise

Shares of metal companies, particularly steelmakers, witnessed gains in early trade as the Directorate General of Trade and Remedies (DGTR) began its investigation into the steel industry’s request for a 25% safeguard duty on imports. This move follows growing concerns over a surge in cheap steel imports, especially from China.

CNBC-Awaaz reported that the safeguard duty could potentially be implemented based on preliminary findings, even before the final report is completed. The DGTR’s probe aims to assess the need for a temporary duty of up to 25% to curb excessive steel imports.

Shares of JSW Steel, Tata Steel, Jindal Steel and Power, Steel Authority of India (SAIL), and Hindalco rose 1-2% following the news. The Nifty Metal index also surged over 1% in early trading, reflecting optimism across the sector.

Brokerage firm Investec highlighted that the safeguard duty, if implemented, would benefit JSW Steel and Tata Steel the most. However, the firm cautioned that the effectiveness of such measures would need close monitoring to gauge their impact on the industry.

The Centre’s potential safeguard duty aims to address growing concerns over cheap steel imports, as India’s finished steel imports from China reached a record high during the first eight months of the fiscal year. Steel Minister HD Kumaraswamy had earlier hinted at imposing the 25% duty to protect domestic mills from these low-cost shipments, which have intensified challenges for local manufacturers.

This development marks a significant step towards shielding the domestic steel industry, and stakeholders are closely monitoring the outcome of DGTR’s investigation.