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Domestic Steel Industry: Government looks at tariff barriers to control imports

ICICIdirect Research 23 Aug 2024 DISCLAIMER

The government has launched an anti-dumping investigation into the import of hot rolled flat steel from Vietnam, prompted by complaints from domestic steel makers
This development bodes well for the domestic steel industry, which is grappling with a rise in steel imports from Vietnam, as one of the top five steel exporters to India in FY24.
As per media sources, India imported ~0.62 MT of HRC steel from Vietnam, which contributes ~20% of the HRC steel imports in FY24.
The surge in imports from China and ASEAN countries have negatively impacted the domestic steel prices which is currently at the 3 years low of ~₹50,000 per tonne. 
India continues to be a net importer of steel for April’24-July’24 period, with imports reaching 2.69 million tons, while exports stood at 1.57 million tons. China was the largest exporter of steel to India at 0.8 MT for the said period followed by Japan and South Korea.
Consequently, imposition of anti-dumping duty is the need of the hour and will provide some relief to domestic steel manufacturers.
Within the overall domestic steel space, we prefer JSW steel as our top pick owing ambitious expansion plans to reach 50 MTPA steel capacity by 2030, superior product portfolio, and healthy profitability guidance. We have a BUY rating on JSW Steel with a target price of ₹ 1,085

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