Tata Steel hits 52-week high, SAIL rallies 3%; what's driving steel stocks?

Steel stocks in demand: In past five trading days, the BSE Metal index outperformed the market by surging 6 per cent, as against 0.98 per cent rise in BSE Sensex.

Share prices of steel companies today

 

Shares of steel companies continued their upward movement for the second straight trading day on reports that the government is preparing a national mission with a proposed outlay of ₹5,000 crore to promote sustainable steel production. Reports also suggest that China may cut steel production in 2025.

 

Among individual stocks, Tata Steel hit a 52-week high of ₹172.45, gaining 3 per cent on the BSE in Monday’s intra-day trade. The Tata Group company stock surpassed its previous high of ₹170.20 touched on September 30, 2024.

 

The stock price of the state-owned company Steel Authority of India (SAIL) rallied 4 per cent to ₹134.70 in intra-day trade. In the past two trading days, the stock has gained 6 per cent. Shares of JSW Steel and Jindal Steel and Power (JSPL) were up 2 per cent each.

 

 

At 09:30 AM; the BSE Metal and Nifty Metal indices were the top gainers among sectoral indices, up around 1.2 per cent, as compared to 0.3 per cent rise in BSE Sensex and the Nifty 50. In the past five trading days, the BSE Metal index outperformed the market by surging 6 per cent, as against 1 per cent rise in the benchmark index.  Track Stock Market LIVE Updates 

Key reasons behind rally in steel stocks

 

As per media reports, the government is preparing a national mission with a proposed outlay of ₹5,000 crore to promote sustainable steel production. The scheme will cover both primary and secondary producers. It aims to drive decarbonization in the steel sector through financial support measures. The support is likely to include concessional loans and risk guarantees.

 

According to ICICI Securities, this will benefit both primary and secondary steel producers, with a greater impact on secondary producers (Electric Arc Furnaces and Induction Furnaces, which primarily use scrap and sponge iron as raw materials). Since technology adoption in the secondary segment is relatively lower compared to primary steel producers, the focus of new technologies will be on improving operational efficiency, increasing the use of renewable energy and scrap, and ultimately reducing carbon emissions. 

 

The brokerage firm in note said they are positive on domestic steel space, with analysts preferring Tata Steel, supported by its ongoing capacity expansion, favorable domestic steel demand, and continued focus on cost optimization.

 

Meanwhile, the recent developments in China seem favourable for the Indian steel sector. Steel production cuts are planned in China and this should help balance demand-supply, thus reducing the chance of cheap Chinese exports. Given the Directorate General of Trade Remedies (DGTR) recommendation of final safeguard duty for three years, the outlook for steel is turning favourable, the Business Standard reported.CLICK HERE FOR MORE DETAILS

 

Rising imports at predatory prices and dumping concerns prompted the Government of India to impose a 12 per cent provisional safeguard duty in April, 2025 on Flat Steel imports for a period of 200 days. This timely measure helped lift domestic steel prices, which had fallen to a three-year low during the fiscal, impacting profitability across the industry, SAIL said in its FY25 annual report.

 

According to the Economic Survey of India, the sustained expansion in the steel sector was supported by large scale infrastructure projects, housing initiatives, and rural and urban development programs, underpinned by the National Steel Policy and the Production-Linked Incentive (PLI) Scheme. To cater to rising domestic demand and reduce import dependence, major private steel producers announced ambitious expansion plans, the company said.