Trump's massive tax cut upcoming, metal industry to roll

Awaiting the US premier, Donald Trump's policy reforms, the markets across the globe including India have been expecting a massive tax cut for individuals and corporate by the US administration. A minimum of 20 per cent tax cut is speculated for the corporate.

The US economy consumes a significant amount of nearly 7 per cent of steel produce from around the world, with 40 per cent of steel being used for construction.

With a rebated tax rate, the construction segment of the economy is likely to catch up, reflecting positively on the global steel demand.

The forthcoming tax cut already reflected on the US prices of hot rolled coils to USD 670 per tonne from a USD 570 in the third quarter of the FY17. Meanwhile, steel prices in India also witnessed a surge from Rs 28,000 a tonne in December 2016 to Rs 33,000 a tonne, at present.

Indian steel manufacturing majors such as JSW Steel and Tata Steel are likely to significantly benefit from the higher demand and prices of metals in the global market.

Further in the non-ferrous segment, aluminium majors such as NALCO and Hindalco will be in a sweet spot with this development.