Last Updated : 29 May 2009 at 14:15 IST

SAIL, Tata Steel boom as Govt hints at import duty

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Commodity Online
MUMBAI: Steel stocks started booming on the bourses after the steel minister’s indication towards additional tax on steel imports.

Steel makers rose sharply on the Bombay Stock Exchange following minister’s comment on steel imports that he would consider a proposal for an additional tax on steel imports.

Public sector major, Steel Authority of India Ltd (SAIL), Jindal Steel & Power Ltd and JSW Steel surged during the afternoon trading session today. SAIL rose by 6.54% to Rs.175.20, Tata Steel Ltd gained by over 6.5% to Rs.408.50.

Jindal Steel & Power Ltd and JSW Steel Ltd recorded moderate gain of over 1% each to Rs.2097 and Rs.559.10 during the afternoon trading session. Bhushan Steel Ltd rose by over 2% at Rs.649 and Ispat Industries Ltd was trading with gains of over 3% at Rs.25.34.

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Virbhadra Singh, the newly appointed steel minister had mentioned that India would consider slapping additional import tax on steel to protect the domestic industries from cheap imports. He further added that the issue had to be addressed immediately. Singh also said the government would ensure production capacity expansion of state-owned firms Steel Authority of India and unlisted steel maker Rashtriya Ispat Nigam.

Indian steel firms had been lobbying for an anti-dumping duty on cheap imports to protect domestic sector. The Director-General (Safeguards) had recommended a provisional safeguard duty of 25% on imports of hot rolled coils/sheets/strips up to the cost, insurance and freight (CIF) value of USD 600 per tonne.

However, the government in first week of May 2009, deferred its decision to impose provisional safeguard duty, saying that it needed to examine the matter further after taking views of the end user industry and it will then decide on the matter within 60 days.

Reports suggested that there had been a significant increase in imports over the last couple of months at low prices, which had impacted the domestic prices. The prices have fallen about 40% from the peak during July- August 2008. Currently steel prices are hovering at Rs.24170 per MT for MCX June contract.