To bring down the spiraling price of steel in the domestic market, the on Govt Saturday, in a surprising move, levied an export duty of 15% on hot-rolled and cold-rolled alloy and non-alloy flat steel products (of 600 mm or more width). Similarly, a 15% is being levied on exports of hot-rolled bars and rods, other bars and rods of iron or non-alloy steel, flat-rolled products of stainless steel, bars and rods of stainless steel, angles, shapes and sections of stainless-steel.

The Finance Ministry also raised export duty to 50% on iron ore and concentrates categories from 30% which is now applicable on lumps above 58% iron content. Further, on iron ore pellets which currently do not attract any export duty, a 15% duty has been levied.

All these levies came into effect from yesterday.

While this is good news for the user industries, especially realty and construction (civil and all infra), capital goods, the steel companies are unhappy. Though they have raked in the moolah for a long time now due to increasing steel prices, they are now crying foul and say that it is sending out the wrong message, will affect capacity expansions.

What the steel industry also does not acknowledge is the waiver of customs duty on the import of some raw materials, including coking coal and ferronickel, used by the steel industry. This move is expected to bring down their costs and help mitigate the impact, to some extent, of the export duty levies.

The steel stocks lead the pack of losers on the BSE today. Of the top five, four are from the steel sector – Jindal Steel, JSL, Tata Steel and JSW Steel, almost all hitting their LCs of the day. SAIL is also among the top 10 losers. The BSE Metal index hit a new low today and of the 10 stocks tracked, only one stock, Hind Zinc is in the green; rest all are in the red.