At two o’clock in the afternoon, the share of Tata Steel was trading at Rs 1026.20, down 12.31% on the BSE. Shares of Jindal Steel & Power also fell over 13 per cent to Rs 478.90. Shares of SAIL (SAIL), the largest public sector steel company, also fell 13 per cent while JSW Steel fell 11 per cent. The stock of Godavari Power and Ispat fell 20 per cent to 311.70 per cent after touching the lower circuit.
increased tax on exports
The government announced the imposition of export duty on raw materials like iron ore and pellets used for making steel. Export duty on all types of iron ore has been increased from 30 per cent to 50 per cent. Similarly, export duty on hot-rolled and cold-rolled steel products has been increased to 15 per cent as against no duty earlier. On the other hand the government has cut import duty on raw materials like PSI, Met Coal and Coking Coal.
Kunal Motisha, analyst at Reliance Securities, said the imposition of export duty on steel would increase supply in the domestic market and bring down prices. Brokerage firm Edelweiss said that this decision of the government will have a negative impact on the steel sector. The capex plans of its companies may be affected. CLSA has slashed estimates for steel stocks. Global Brokerage has downgraded the ratings of the shares of Tata Steel, JSW Steel and JSPL.
How much was exported last year
India exported 1350 million tonnes of finished steel in the financial year 2022, while it exported 10.8 million tonnes of steel in the financial year. Domestic steel consumption during this period stood at 106 million tonnes as against 940 million tonnes last year. In the financial year 2022, 153 million tonnes of iron ore were exported from the country, 11 million tonnes of iron ore pellets were exported.
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