Imposing antidumping duty on import of stainless teel from China, US and European Union, is a productive move from the government. In an interview to ET Now, Deven Choksey of KR Choksey Investment Managers, says that steel producers would ultimately benefit only from a lower cost of production. ET Now: The government's is trying to protect local steel producers by imposing the antidumping duty. on imports. How crucial do you think this could be? Deven Choksey: It is a very proactive move on the part of the government. However, the most important part is that dumping from China continues. China is more and more clear that it wants to clear a good amount of that inventory from higher productions. Given that this situation is likely to continue for a longer period of time, it is significant to note that global commodity prices would remain low. Domestic companies will have to adjust their cost structure eventually. Measures like imposing of the antidumping duty would probably help but ultimately the lower cost of production would probably help companies to eventually safeguard themselves from the kind of imports coming from China. Many companies would find themselves difficult to adjust into this kind of an environment. I do believe at this point of time that metal commodity companies would have an advantage of lower energy costs but will also continue to struggle with a good amount of pipeline/finished product inventory. I am not totally sure how much of it would reflect into the profit performance of the companies though the stock market would stabilise as far as the prices are concerned.
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