Tata Steel shares rose 1% on the BSE to a three-month high of Rs 111.60 on Friday. The stock has been trading at its highest level since August 19, 2022. In contrast, the S&P BSE Sensex was down 0.82% at 62,764 at 11:48 am.

Tata Group Iron & Steel Company’s shares rose for the fourth day in a row, gaining 6% over the same period. It has gained 10% over the past month, compared with a 3% gain for the benchmark index.

However, Tata Steel has underperformed the market and its peers over the past six months, with its shares up 3% on weak earnings, compared with a 12% gain in the Sensex. Market prices for JSW Steel (up 29%) and Jindal Steel & Power (up 49%) surged more than 25% during the period.

Last month, the government scrapped a 15% export tax on steel products (imposed in May 2022) to boost the domestic steel industry and exports.

Export duties on steel products are now zero, compared to the previous 15%. Analysts at ICICI Securities said removing export duties would be a significant relief and long-term positive for the domestic steel industry.

The government has also removed export duties on lump iron ore fines and pellets with iron content below 58%. Exports of iron ore lumps and fines with an iron content above 58% will now be subject to a lower duty of 30% (down from 50% previously). Import tariff preferences for anthracite/PC coal, coking coal, coke and semi-coke, and ferronickel have also been removed. All these tariff changes are effective from November 19, 2022.

“The removal of export tariffs bodes well for domestic steel companies, although in the long run. Since May 2022, global steel demand has turned sluggish, which has put downward pressure on steel prices. Due to the current global market for steel, but the recent move to remove export tariffs on steel products does provide opportunities for domestic players to substantially increase export volumes at a time when global steel prices are strengthening,” the broker said in an industry update. It upgraded Tata Steel to “buy” from “hold.”