Metal Stocks: Shares of steel and aluminum companies will be under watch in the Indian stock market. The reason is the signal from America. United States Trade Representative (USTR) Jamieson Greer has said that the Trump administration is considering some changes in the comprehensive tariffs imposed on steel and aluminum. However, there is no talk of complete removal of the basic tariff. US President Donald gives a lot of importance to Jamie Greer in his trade policy.
Tariffs will remain, but relief possible
Speaking to CNBC, Greer made it clear that the core tariffs will remain. But some changes can be made to reduce the burden of rules on companies. Many companies have complained that the calculation of duty on derivative products made of steel and aluminum has become very complex and expensive. The government is now thinking of simplifying this process.
Immediate impact in American market
After these statements, a sharp reaction was seen in the American market. Alcoa Corp. Shares fell by about 7.9%. Kaiser Aluminum Corp. And Century Aluminum Co. also declined by 4.5% and 4.3%. Steel company Cleveland-Cliffs Inc. Shares also fell by more than 3% in early trade.
What effect will it have on Indian companies?
Its impact on Indian companies like Vedanta Ltd, Hindalco Industries, Tata Steel and JSW Steel may be mixed. If tariffs are softened, price pressure in the global market may reduce. This will provide relief to the downstream industry and the pressure on demand may reduce. Better trade flow can also stabilize the export situation.
Hindalco’s American unit under eye
However, Hindalco has acquired the rights of its American subsidiary Novelis Inc. You may have to bear some pressure through this. Until recently, Midwest aluminum premiums in the US were high due to high tariffs, giving Novelis an advantage. If duties are relaxed and premiums come down, Novelis’ margins could be impacted.
50% tariff continues for now
The US administration has also reiterated that the basic tariff of 50% on foreign steel and aluminum will remain in place. The market will now wait to see how comprehensive the potential changes will be and how they will be implemented.