US steel producers are plagued with the issue of increasing imports most of the time. In 2012, the total steel imports were of the order of 25.8 million tonnes, higher by 17% compared to the previous year and in Q1 of 2013.
Although steel imports have gone down by 8% relative to last year?s level, the threat of imports always looms large in the representations of US-based producers. And as a corollary, the emergence of China taking the market away from them has occupied the centre of attention. US has a well laid out mechanism of import licensing that enables the country as well as the producers to get a fairly good idea about the incoming import arrivals and even know the customers for whom the import would be taking place.
The department of Commerce in US has its own system of evaluating the implications of high import arrivals and is ably supported by the inputs and early signals provided by the producers? body.
In fact, the same transparent system of monitoring trade data has been evolved in all NAFTA countries, Japan, South Korea and a few Asian countries like Indonesia, Thailand, Vietnam, Malaysia.
In India, the imports have been maintaining an average share of 8-9% in apparent steel consumption over the last few years except in 2012-13 when it has jumped to 11% of total steel consumption. Although hardly any advance information is made available by any government agency to the domestic steel industry and all analysis is confined to post-arrival phase, the sudden jump in imports and the adverse implication of the huge money outflow towards widening the CAD does appear to be a eye-opener. But lamenting over the issue of high net imports of steel must lead to a demand for change in the import monitoring system. It is quite rational on the part of domestic steel producers to have a broad advance intimation of the import deals being entered into.
This would enable them to reorient their production and marketing strategies, decide on the product-mix in the fresh capacity-addition planning and reinstate the trust of the domestic customers.
The system of data collection and analysis currently pursued in our country especially with respect to commodity trade need a thorough change. Like in many other countries, a number of our administrative ministries must develop and maintain a detailed data bank to commensurate with the needs of fighting the anti-dumping and countervailing duty cases.
Advance signal on import bookings would provide breathing time to domestic producers to face the cut-throat competitive challenges. A reorientation of the systems and procedures by the government must form an inevitable part of the current scenario of global competition.
The author is DG, Institute of Steel Growth and Development. The views expressed are personal