Listed Steel Companies to Flourish As Govt Extends Duty on Chinese Imports

The National Tariff Commission (NTC) has extended the existing anti-dumping duty (ADD) of up to 40.47 percent on imports of Galvalume Steel Coils/Sheets from China until February 8, 2027, according to a notification dated June 28, 2025. The extension came into effect immediately. The decision follows an application submitted by local producers of Galvanized Coils on August 24, 2024, highlighting that importers were bypassing the existing ADD by switching to slightly different but similar products like Galvalume Steel Coils/Sheets, according to a report by Topline Securities. Topline said this will positively impact domestic flat steel manufacturers, particularly listed players such as International Steels Limited (ISL) and Aisha Steel Mills (ASL). Analysts note that three years ago, the local industry served 60 percent of the domestic demand, while 40 percent was met through imports. That ratio has since reversed, with imports now supplying 60 percent of the market. Channel checks suggest Galvalume imports stood at 220,000 tons annually during 10–11MFY25, with full-year estimates reaching 250,000 tons. Of this, 50,000–70,000 tons are considered legitimate demand, while the remainder is attributed to duty evasion and dumping. Galvalume is a key substitute for domestically produced Galvanized Coils and is used in applications such as roofing, wall panels, household appliances, and automotive parts. With the ADD extension, analysts expect local producers to regain lost market share. This measure complements other positive developments in the flat steel sector, including the imposition of a 10 percent sales tax on imports via FATA/PATA regions and the removal of regulatory duty on hot rolled coils (HRC), a critical raw material. As a result, analysts have increased volumetric sales assumptions for ISL from 380,000/341,000 tons to 368,000/401,000 tons for FY26/FY27, reflecting an increase of 19 percent and 18 percent, respectively. Consequently, earnings forecasts for ISL have been revised upward from Rs. 9.3/11.6 per share to Rs. 13.1/16.4 per share for FY26/FY27 (+41 percent). Topline maintains a ‘Buy’ rating on ISL, with the stock trading at FY26 and FY27 price-to-earnings (P/E) multiples of 6.5x and 5.2x, respectively.