Budget 2022: Brokerages expect duty cut on metals to spur margins

Reduction in import duty on raw materials and finished products of steel, and higher allocation under infrastructure and housing for all schemes in the Budget could augur well for domestic industry

Reduction in import duty on raw materials and finished products of steel, and higher allocation under infrastructure and housing for all schemes in the Budget could augur well for the domestic industry.

Additionally, the government will have to carry out a balancing act on steel pricing to protect the MSME sector, which suffered significantly in early 2021, brokerages said.

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Public capex has been relatively soft over the past few years and is expected to pick up from FY23. Construction and infrastructure sectors form 60 per cent of domestic steel demand.

The Indian Steel Association (ISA) wants basic Customs duty on coking coal, stainless steel scrap, nickel to be reduced to zero.

Ficci has asked the government to reduce Customs duty on ferronickel to zero from 2.5 per cent. It has called for higher duty of 12.5 per cent to be imposed on import of stainless steel flat products.

Reduction in import duty on raw materials (coking coal) may improve cost structure and margins for the steel industry, said Axis Securities.

Among base metals, the aluminium industry has demanded a cut in import duty by 2.5 per cent on critical raw materials, which may improve cost competitiveness of domestic smelters.