Amid weak demand, domestic hot-rolled coil prices have fallen by almost 14% since the export duty was levied on steel effective 22 May, according to SteelMint data. Therefore, the potential removal of export duty on steel will be a primary trigger for shares of steel manufacturers, many of which have hit 52-week lows in the past two months. Note that shares of many metal companies had scaled to new 52-week highs in March-April, with commodity prices such as steel and aluminium escalating because of the Russia-Ukraine war.

In the past week, the Nifty Metal index has gained 3.6%, beating the Nifty50 index, which has risen 1.6%. News reports indicated that China plans a stimulus of $220 billion by advancing bond sales due in January. There is an anticipation that this will increase infrastructure spending and boost commodities. There is also some optimism around reports citing sources that the Indian government may reconsider the export duty levied on steel.