Tata Steel, SAIL, NMDC tank up to 7 pct; the China factor behind slump in metal stocks

Metal stocks such as Tata Steel, Hindustan Copper, SAIL and NMDC slumped up to 7 per cent on Monday after Chinese iron ore fell by over 4 pct to its lowest level since November as high inventory levels and a weak domestic steel market weighed on prices. Shanghai steel rebar contract also falls 2.5 pct.

The Nifty Metal index slipped as much as 2.94 pct to its lowest since December 18. Hindustan Copper, NMDC and SAIL were among the biggest pct losers on the index, down in the range of 6 per cent to 7 per cent. Tata Steel was the leading loser on Sensex and Nifty, falling 4 per cent on the bourses. 

Worries about the potential for a US- China trade war and frustration over US President Donald Trump’s steel and aluminium tariffs also hurt investor sentiment.

Up to Friday’s close, Nifty metal index had fallen 7.5 pct since Trump announced plans earlier this month to impose tariff on steel and aluminium imports. He imposed a 25 per cent tariff on import of steel and 10 per cent on aluminium.

Trump said strong steel and aluminium industries were vital to the US national security. 

“Absolutely vital. Steel is steel. You don’t have steel. You don’t have a country. Our industries have been targeted for years and years. Decades, in fact, by unfair foreign trade practices, leading to the shuttered plants and mills, the laying-off of millions of workers, and the decimation of entire communities. That’s going to stop,” he said.

(With inputs from Reuters)