Tata Steel hits 52-week high, SAIL surges; here’s what’s driving the steel stock rally

Steel stocks rally today: Shares of steel companies rallied in early trade on Monday, extending gains for a second straight session after media reports suggested the government is preparing a Rs 5,000 crore national mission to promote sustainable steel production. Sentiment was further boosted by speculation that China may cut its steel output in 2025, potentially reducing global supply and lifting prices.

At 9:30 AM, the BSE Metal and Nifty Metal indices were the top sectoral gainers, rising around 1.2 per cent, outpacing the BSE Sensex and Nifty 50, which gained 0.3 per cent each. In the last five trading sessions, the BSE Metal index has surged 6 per cent, outperforming the 1 per cent rise in benchmark indices.

Among individual stocks, Tata Steel climbed over 3 per cent to hit a 52-week high of Rs 172.45, surpassing its previous peak of Rs 170.20 hit on September 30, 2024. Analysts remain bullish on Tata Steel, citing strong domestic demand, cost efficiency, and ongoing capacity expansion.

SAIL (Steel Authority of India Ltd) rose nearly 4 per cent to Rs 134.70 in intra-day trade. The stock has rallied 6 per cent in the past two sessions. JSW Steel and Jindal Steel & Power (JSPL) were also up by 2 per cent each.

Why are steel stocks rising today?

According to reports, the Government of India is planning a major policy push through a national mission aimed at decarbonising the steel sector. The Rs 5,000 crore scheme is expected to offer financial incentives such as concessional loans and risk guarantees to both primary and secondary steel producers.

Analysts are increasingly positive on the Indian steel sector outlook, with Tata Steel emerging as a top pick due to its robust fundamentals.

Import duty support lifting steel prices

In a separate development that supported the sector, the Indian government in April 2025 imposed a 12 per cent provisional safeguard duty on flat steel imports for 200 days. This measure was introduced amid concerns over cheap imports and dumping, which had dragged domestic steel prices to a three-year low, impacting profitability across the industry.

According to SAIL’s FY25 annual report, the safeguard duty was timely and helped stabilise prices, boosting margins for domestic producers.