Posted on March 19, 2025, by Niftynews
SAIL shares and NMDC Steel shares saw significant gains on March 19, 2025, after the Directorate General of Trade Remedies (DGTR) recommended a 12% safeguard duty on the import of specific steel products. This measure aims to protect domestic steel producers like SAIL and NMDC Steel from the detrimental effects of rising steel imports. As a result, both companies witnessed a notable surge in their stock prices, with SAIL shares rising by 5% and NMDC Steel shares climbing by 8.3% during the intraday trade on the Bombay Stock Exchange (BSE).
Impact of the 12% Safeguard Duty on SAIL Shares and NMDC Steel Stocks
The 12% safeguard duty recommendation comes as part of India’s broader effort to protect its domestic steel industry from the adverse effects of unfair trade practices, particularly from low-priced imports. The temporary safeguard measure is valid for 200 days, which means it will offer a period of relief to domestic producers like SAIL and NMDC Steel. By imposing this duty on specific steel imports, the government aims to help improve the profitability and market positioning of these companies, particularly SAIL, which is one of India’s largest steel producers.
The surge in SAIL shares and NMDC shares reflects investor optimism surrounding the potential benefits that this safeguard duty can bring to domestic steelmakers. Both companies have struggled to maintain healthy margins in recent years due to the influx of cheaper steel imports. With the imposition of this safeguard duty, both SAIL and NMDC Steel are now in a better position to compete in the market, as they face less pressure from unfairly priced foreign steel products.
SAIL Shares Performance on BSE
On the morning of March 19, 2025, SAIL shares experienced a remarkable rise of 5%, touching a day’s high of ₹114.40. The increase in SAIL shares can be attributed to the positive sentiment generated by the DGTR’s recommendation of the safeguard duty. Investors are optimistic that the duty will help reduce the supply of imported steel, which has been putting downward pressure on the prices of domestically produced steel.
Additionally, SAIL is well-positioned to take advantage of this new policy, as it is one of India’s leading steel producers. The company is likely to see a boost in its revenues and profitability, as domestic demand for steel products is expected to remain strong, while imports will become less competitive due to the safeguard duty.
NMDC Steel Shares Surge on Duty Recommendation
In addition to SAIL shares, NMDC shares also surged by 8.3%, reaching an intraday high of ₹36.40 on March 19, 2025. NMDC Steel, a subsidiary of NMDC Ltd., is another key player in the Indian steel market. The recommendation of the 12% safeguard duty has provided a much-needed boost to NMDC Steel shares, which have been under pressure due to the ongoing competition from cheaper imported steel products.
With the safeguard duty in place, NMDC Steel is likely to benefit from reduced competition and higher domestic prices for steel. The increase in NMDC Steel shares reflects the market’s confidence in the company’s ability to capitalize on this policy change. As India’s largest iron ore producer, NMDC Steel has a unique advantage in the steel market, and the duty could give it a competitive edge in the domestic steel market.
The DGTR’s Role in Protecting Domestic Industries
The Directorate General of Trade Remedies (DGTR) is responsible for investigating trade-related issues and implementing measures such as anti-dumping duties, countervailing duties, and safeguard duties. The 12% safeguard duty is a temporary protection measure that aims to protect domestic producers from surges in imports that could harm their market share and profitability.
The DGTR has invited comments on its findings, with a 30-day submission window before a final decision is made. If implemented, the safeguard duty will apply to specific steel products, including cold-rolled and hot-rolled steel, which are important materials for various industries such as construction, automotive, and manufacturing.
Market Outlook for SAIL Shares and NMDC Steel Shares
The market outlook for SAIL shares and NMDC Steel shares remains positive, with both companies benefiting from the temporary relief provided by the safeguard duty. While the duty will not eliminate the challenge posed by imports entirely, it will provide a period of stability for SAIL and NMDC Steel, enabling them to strengthen their positions in the domestic market.
As the 12% safeguard duty becomes effective, investors will closely monitor the performance of SAIL and NMDC Steel in the coming months. If the policy leads to improved pricing power and higher revenues for these companies, it could result in sustained growth for SAIL shares and NMDC Steel shares over the long term.
Conclusion
The 12% safeguard duty recommended by the DGTR has had an immediate positive impact on SAIL shares and NMDC Steel shares, as both companies have seen significant gains in their stock prices. The safeguard duty provides much-needed protection for domestic steelmakers, allowing them to compete more effectively against unfair trade practices. With investor confidence rising, SAIL and NMDC Steel are poised to benefit from this policy change, offering potential growth opportunities for investors in the Indian steel sector.
