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Stocks of major steel companies are seen slightly down this week, as the sector's fundamentals continue to remain weak. Most companies also have refrained from raising steel product prices for May due to the slowdown in demand. Stocks of metal companies had risen early last week but gave up all gains eventually on profit booking. In the coming week, there is no positive trigger that can really lift prices of major steel stocks. The government imposed basic customs duty of 2.5% on iron, and aluminium, steel and stainless steel scrap on May 8 to safeguard interests of domestic metal producers. However, industry officials fear that such a move could raise prices of finished goods in turn hurting the already beleaguered sector.
Scrap is a key input in any metal manufacturing, which is not available in large quantities locally, thus imports are imperative. An increase in import duty would result in eventual increase in finished goods price, thus increasing inflation and this would dampen the spirit of the (metal) sector that is already quite low. Among ferrous metals, Ushdev International actively trades in steel and iron ore, and in non-ferrous metals segment, it trades in copper and zinc, among others.
