Steel Stocks Extend Rally on Reports of Import Duty Hike

Steel manufacturers rallied for a second day on reports that the finance ministry may increase import duty on long and flat steel products to protect the interest of domestic producers.

Tata Steel jumped over 3 per cent on Wednesday following yesterday's 3.4 per cent up move. State-run SAIL jumped around 5 per cent adding to Tuesday's gain of 4.5 per cent, while JSW Steel advanced around 2.5 per cent, taking its two-day gains to around 8 per cent.

According to media reports, the government may increase import duty to 12.5 per cent to 13 per cent from current 10 per cent on flat steel products. This would help curb steel imports into India and will help domestic steel producers, analysts said. The government had last increased import duty on flat steel from 7.5 per cent to 10 per cent in June.

Shares of steel companies have underperformed the broader indices in last one year due to falling demand and weak prices.