Metal stocks, which had been soaring until lately, are now in free fall. The Nifty metals index is down 34% from its 52-week high of 6,825.65, while the BSE metals index is down 19%.
Prices peaked in early April after a surge in metal stocks following the Russia-Ukraine conflict. However, because of COVID outbreaks and restrictions, as well as a recession in China, prices have been pressed.
The breakdown is most visible in ferrous commodities, such as steel, which has witnessed a big correction since the government imposed an export tariff on steel exports from India.
On May 22, the government startled the business by imposing an export tariff. All grades of iron ore are subject to a 50% duty, pellets are subject to a 45% duty, and non-alloy steel, with the exception of semi-finished steel, is subject to a 15% duty.
Export taxes are having a negative impact on domestic steel prices, according to data, as the steel pricing market fell for the tenth week in a row ending June 17. The breakdown is most visible in ferrous commodities, such as steel, which has witnessed a big correction since the government imposed an export tariff on steel exports from India.
Despite the inventory build-up and fall in retail sales, no reductions in the export tariff have been made so far; nonetheless, there is a silver lining for domestic steel manufacturers. The drop in coking coal/iron ore prices is helping to cushion the impact of export duties, resulting in greater spreads notwithstanding the price decline.
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