Steel cos get duty boost amid glut

Problem of plenty

- Ashish Agrawal [e-mail]

The share prices of domestic steel producers have risen by 4-6% since 30 December after the finance ministry notified the extension of safeguard duty imposition on steel imports, as per the recommendation of the director general of trade remedies.

The big gainers here are JSW Steel Ltd and Jindal Steel Ltd (formerly Jindal Steel & Power Ltd), which increased 6%.

The duty would be levied for three years on most grades of flat steel products at 12% for the first year, 11.5% for the second and 11% for the third year. Recall that the ministry had notified an interim order imposing the duty in April to stop the surge in imports, which had lapsed on 7 November. The delay suggests a reluctance on the part of the ministry due to the adverse impact of higher steel prices on consuming industries, particularly small and medium-sized enterprises, which are already facing headwinds due to lower exports.