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Domestic Steel Industry: Light at the end of the tunnel - finally!!

ICICIdirect Research 09 Jan 2026 DISCLAIMER

The government has imposed the much-awaited safeguard duty on flat steel imports. The safeguard duty has been set at 12% for imports in FY26E, 11.5% for FY27E and 11% in FY28E.
This is against backdrop of the provisional safeguard duty of 12% which was imposed in April 2025 and expired in Nov 2025.
This is important as steel production in China is down ~4% in CY25 at ~964 MT, while its exports are up ~10% YoY at ~120 MT; representing 12% of production vs. 5%-6% in the past
This move is positive for the domestic steel sector amidst domestic steel prices declining to 5 years low of ~₹46,500/ton in Dec’25.
Domestic steel prices have already made a bottom and started firming up in anticipation of Safeguard duty mid-December and have further strengthened post the official notification.
Current domestic steel prices are up by ~₹4,500/ton over the past month to ~₹51,000/ton as on date.
This is positive for domestic steel companies especially Tata Steel India and JSW Steel, as flat steel contributes >75% of their overall portfolio.
On that note, we remain positive on domestic steel space, however valuations limit gains for JSW Steel (Rating: HOLD; Target: ₹1,280) and Jindal Steel (Rating: HOLD; Target: ₹1,130).
Our top bet in the ferrous space is Tata Steel, supported by its ongoing capacity expansions plans in India, restructuring at its European operations, and sustained efforts toward cost optimization. We have a BUY rating on Tata Steel at a target price of ₹210.

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