Tata Steel share price, SAIL share price, JSW steel share price: Top metal stocks were under extreme pressure on Monday following the government's decision to impose export duties on steel products.
The Nifty Metal index corrected more than 7% in the early trade as JSW Steel, Tata Steel hit the lower circuits while the state-run Steel Authority of India (SAIL) tanked over 10 % to hit 52-week low. Hindalco also dropped more than 5%.
At 11 AM, Tata Steel share price was down by more than 11% to trade at Rs 1,039 on the NSE. JSW Steel crashed over 12% to hit 52-week low of Rs 554. Likewise, SAIL was trading at Rs 74 after crashing by more than 9.50%.
Metak stocks under pressure
Metal stocks are already facing the heat due to geopolitical tensions and Nifty Metal has corrected over 15% in the last one month.
The government on Saturday waived customs duty on the import of some raw materials, including coking coal and ferronickel, used by the steel industry, a move which will lower the cost for the domestic industry and reduce the prices. Also, to increase domestic availability, the duty on exports of iron ore was hiked up to 50 per cent, and a few steel intermediaries to 15 per cent.
In a statement, the steelmakers' body, the Indian Steel Association (ISA), said that the imposition of export duty on steel will only send a negative signal to investors in the steel sector and will adversely impact the sector's capacity utilisation.
"India may lose the export opportunities now and this decision may also impact the overall economic activity in the country," the association said.
Also, the imposition of export duty will help other countries to increase their share in the global market, which India will vacate, the ISA said, adding that rebuilding the lost ground may take a very long time, as the supply chain will be disrupted, while India's credibility as a reliable exporter will take a hit.