Why are Steel stocks rallying in Friday's trade

Steel stocks such as Tata Steel Ltd., SAIL, NMDC Steel Ltd., Maharashtra Seamless rallied up to nearly 10% on Friday, February 21. This has resulted in the Nifty Metal index being among the few indices that are trading with gains, while most of the other indices are in the red.

Here are some of the factors behind the upmove in such names:

Tata Steel CEO and managing director TV Narendran told CNBC-TV18 that the industry is expecting news from the Centre soon on safeguard duties after it presented concerns regarding the same to the latter.

Earlier this month, at the CII Council Meet, Tata Steel's Executive Director and CFO, Kaushik Chatterjee, and JSW Steel's Deputy MD, Jayant Acharya, highlighted the importance of safeguard duties to counter unfairly priced imports and support the steel sector's capital expenditure (capex) investments.

Chatterjee emphasised that while India's capex push remains strong, driven by a ₹11-lakh-crore rupee infrastructure spend last year, external factors pose risks to industry stability. "We just need to ensure that the enablers, from a policy point of view, do not expose us to unfairly priced imports," he said.

Meanwhile, less than a fortnight ago, US President Donald Trump levied 25% tariffs on steel and aluminum imports. "Today I'm simplifying our tariffs on steel and aluminum. It's 25% without exceptions or exemptions," he had said.

Narendran on Friday said the Trump tariffs could strengthen the domestic ferrous companies' plea for protection.

Analysts also said the fourth quarter EBITDA/tonne may have improved by ₹1,000 to ₹1,500/tonne compared to the previous quarter. This comes on the back of higher volume, flattish coal prees and marginally-higher steel rates.

The Tata Steel MD and CEO there are hopes that global steel prices have bottomed out — as Chinese non-integrated steel producers earn gross margin of $185/tonne, which are currently below the 10-year averages.

Tata Steel shares surged 2.57% in trade today, while SAIL, Maharashtra Seamless and NMDC Steel gained 4.84%, 9%, and 9.81%, respectively.

Also Read: NHPC clarifies on decision to buy co-promoter stake in PTC India