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Amit Dixit, analyst at ICICI Securities, says the safeguard duty on steel imports was widely expected and had already been factored in.
Domestic steel prices rose, and imports fell, as buyers were unsure about how the safeguard duty would affect incoming shipments, he said.
The government on April 21 imposed a 12% safeguard duty on imports of non-alloy and alloy steel flat products for a period of 200 days, following a proposal by the Directorate General of Trade Remedies (DGTR).
Currently, headline hot rolled coil (HRC) prices are around ₹4,000–₹4,500 per tonne higher than the previous quarter. This may result in higher earnings for companies like JSW Steel and Tata Steel in the first quarter. Dixit estimates an earnings benefit of around $10 per tonne for flat steel players.
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However, he also noted that Indian steel prices are now trading at a premium compared to global prices. Domestic prices are about 7% higher than the landed cost of Chinese imports and 12% above South Korean levels. This could lead to a price correction or a possible return of imports.
On stock picks, ICICI Securities prefers JSW Steel and Tata Steel among large players, and Shyam Metallics in the smaller segment.
Dixit also spoke about the non-ferrous sector. He said they are positive on stocks like Vedanta and Hindalco but noted that these are more linked to global prices and less driven by domestic demand.
“In case of Vedanta, it is more of an immediate impact. Hindalco will gradually build up,” he said, adding that while both stocks look attractive, ICICI Securities currently prefers ferrous over non-ferrous plays.
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