Steel Stocks Eye Re-rating as Govt Imposes 3-Year Safeguard Duty on Imports

• Government imposes a three-year safeguard duty on select steel imports: 12% (1st year), 11.5% (2nd), 11% (3rd).
• The duty aims to curb cheap steel inflow, particularly from China, Vietnam, and Nepal; specialty steel products are exempt.
• Analysts like HSBC and Morgan Stanley foresee medium-term earnings support, price hikes, and potential sector re-rating for domestic steelmakers.
• Morgan Stanley identifies JSW Steel and SAIL as best positioned to benefit, followed by Tata Steel and Jindal Steel.
• Citi and UBS express caution, citing potential for limited price hikes, rangebound stocks, and cost pressure on downstream sectors like auto companies.

Why It Matters: New safeguard duty on steel imports could re-rate steel stocks but may raise costs for user industries.