- 21 Nov 2022
- ICICIdirect Research
EXPORT DUTIES ON IRON ORE, BASE METALS (STEEL) ROLLED BACK
News:
The Government of India has rolled back export duties levied on iron ore and ferrous products (steel), reversing an earlier order from May 2022 when it had imposed higher export taxes on said commodities
View:
Metals are an integral raw material for the automotive industry with steel & aluminium together accounting for ~50-60% of raw material costs in a vehicle. With the removal of export duty, prices of metals in the domestic market are expected to rise in the near term thereby limiting margin recovery for the industry, as a whole. However, given the macro uncertainty in key global markets with muted demand prospects, the quantum of price hike is difficult to ascertain at this point in time. We will closely monitor the movement in steel prices consequent to the lifting of the ban. It is sentimentally negative for the sector with some weakness already witnessed across OEM stocks, which have been declining in the last two trading sessions
Impact:
Negative