Indian Steel Players Hold Strong In Market A Day After Trump’s Tariff Announcement

As US President Donald Trump announced reciprocal tariffs on trading partners on April 2, 2025, the Indian market opened on a negative note on April 3. However, major steel and aluminium companies were trading in the green, including Tata Steel, SAIL, Jindal Stainless, among others.

During his announcement on levying reciprocal tariffs, Trump had kept the tariffs on Indian steel and aluminium imports unchanged at 25 per cent, which was announced earlier this year. As a result, steel and aluminium stock companies stood their ground despite the downtrend seen in the equity market today morning.

Jindal Stainless gained up to 4 per cent to an intraday high of Rs 597, while, NMDC Limited rose over 2.5 per cent at an intraday high of Rs 70.99. SAIL saw an upside of 2.3 per cent at an intraday high of Rs 119.60, and Tata Steel rose over 2 per cent at an intraday high of Rs 155.95, on the BSE, on April 3.

Explaining today’s gap-up opening amid uncertainty, Prashanth KP Kota, CFA, lead analyst – basic materials sector, Choice Broking, said: “If you look at aluminium and steel, President Trump announced Section 232 a month ago, imposing a 25 per cent tariff. Today, he clarified that for products and sub-sectors already under Section 232, there would be no additional tariff. This was a relief as the market feared fresh tariffs on steel, but there was no new negative development apart from what was already known.”

He added: “At a time when many sectors faced negative developments, steel appeared relatively better, making it a safe haven. However, this is just the first-order effect. The second-order effect is global uncertainty. Large companies might defer capital expenditures, industrial projects, or factory construction, leading to potential demand restrictions. If global uncertainty persists, second-order demand issues could arise. This explains why steel stocks slightly gave up gains and closed in the red.”

Tata Steel and SAIL shares closed in the red, down 0.65 per cent and 0.21 per cent at 153.65 and Rs 118.45, respectively. Elsewhere, Jindal Stainless share price closed in the green, up 0.47 per cent at Rs 592.25. NMDC Steel Limited also closed in the green, up 3.03 per cent at Rs 36.02.

Kota said: “Large companies might defer capital expenditures, industrial projects, or factory construction, leading to potential demand restrictions. If global uncertainty persists, second-order demand issues could arise. This explains why steel stocks slightly gave up gains and closed in the red.”

The steel industry is quite independent in terms of a single country export. The US accounts for less than 1 per cent of Indian steel exports, positioning steel stocks unfazed.

Ministry of Finance To Approve 12% Import Duty To Prevent Steel Dumping

Sunny Agrawal, deputy vice-president and head of fundamental research at SBI Securities, says: “India’s steel exports to the US account for a fraction of its overall crude steel production (less than 1 per cent). The Indian steel industry is more focused on the domestic markets, which have robust growth potential. Moreover, the recent proposal to implement the safeguard duty temporarily by 12 per cent augurs well for steel cos in terms of profitability, which was under pressure for the last nine months.”

Notably, domestic steel prices also witnessed a rise in their prices in the last few months to protect themselves from an anticipated global trade war, according to a recent report by Business Standard. The report cited data from BigMint that in March 2025, hot rolled coil (HRC) prices ex-Mumbai rose by Rs 600 per tonne month-on-month (m-o-m) basis, increasing the prices from Rs 48,400 per tonne in February to Rs 49,000 per tonne. Meanwhile the average monthly prices for January stood at Rs 47,000 per tonne.

Kota added: “The DGTR recommended a 12 per cent safeguard import duty, awaiting approval from the Department of Revenue under the Finance Ministry. This could be implemented anytime, and recent developments have strengthened the case for it. If the US restricts imports from various countries, excess steel could spill into India. To prevent this, the Indian government may act. The investigation is complete, and the decision now rests with the Ministry of Finance. Once approved, this safeguard duty will cushion the sector from external disruptions.”