Cold Steel

Updated: Aug 31 2002, 05:30am hrs
Obviously, the US International Trade Commission voted against the steep anti-dumping duties on Cold-Rolled steel imports from India, Japan, Australia, Sweden and Thailand as these didnt hurt Americas steel industry. Yet such is the overwhelming clout of the US steel lobby that about 46 per cent of existing anti-dumping orders are on steel products alone, although this commodity accounts for barely 2 per cent of the countrys import bill. About seven months ago, US president George Bush had directed the ITC to look into low cost steel imports into that country in order to safeguard the interests of domestic industry. In March, the Bush administration had imposed a 30 per cent tariff on both Hot-Rolled and CR steel imports to check imports. In the light of the ITC veto, nearly 25 per cent of steel imports will now be exempted from anti-dumping duties. India must make serious efforts to cash in on this situation as the average price per tonne has gone up to $450-500. Of US imports of 2.5 million tonnes, Indias exports are somewhat miniscule at 7,000 tonnes of CR products. India exported about 65,000 tonnes of galvanised steel products this year.

ITCs voting out the steel levy has been generally welcomed by the steel exporting countries. For their part, American steel companies which are smarting under a sense of humiliation and nursing bruised egos will now have to take up the challenge of restructuring to survive the competition. Meanwhile, CR steel prices in the US have gone up by over 60 per cent, pointing to a shortage of the product. Much of the vehemence of the US steel companies may thus prove misdirected. Under section 201 of the US Trade Act, anti-dumping duties in the range of 29-43 per cent were imposed on Indian steel in March 2002. In April 2002, preliminary anti-dumping margins of 154 per cent were imposed on Indian exports of cold rolled carbon steel. Their impact has been softened as India being a developing country has been exempted from section 201 provisions. On the face of it, Indian steel companies are unlikely to take advantage of the squashing of anti-dumping duties because of the lure of the domestic market. If thats growing at about 7 per cent, it holds out much better prospects than slugging it out in the US market. With demand from user sectors such as automobiles, construction, consumer durables and housing, HR prices have gone up 30 per cent and CR by 16-17 per cent in recent months. HR products in fact face a shortage of about 1.3 million tonnes in the future. But it is high time that Indian steel companies like Tata Steel and JISCO also looked outward.