Steelmakers find no respite from cheap imports even though the government has re-imposed the 5% import duty on steel. This is because prices of hot rolled coils (HRC)?a base product that decides the price of downstream steel products?in the international market are still about $100 lower than Indian prices. This meant that the wide price differences have easily offset the duty impact, thus, leaving domestic producers with no choice but to lower prices from next month to compete with imports.
The situation would be aggravated from December 1, when China would remove the 5% export tax on flat steel products. These products made up 46% of China?s steel exports last year. Cheap steel comes to India mainly from China and CIS countries.
The landed import price of HR coils is around $525 a tonne after adding the 5% import duty, which was re-imposed on November 18. But the prevailing domestic price is around $630.
Early this month, steel producers have slashed prices by about Rs 4,000-6,000 per tonne. Before that, between September and October, they reduced prices by about Rs 10,000 per tonne. Steelmakers are scheduled to meet next week to review prices again.
Industry officials say because of the wide gap between the landed and domestic prices they had suggested a higher import duty of 15% on steel. In fact, the steel ministry had suggested an import duty of 10%. Some producers were anticipating an import duty of 20%.
Vinod Mittal, vice-chairman & managing director of Ispat Industries, said on the day the government slapped the import duty, ?In view of the present market conditions, the industry was expecting a higher import tariff of 20 %.?
So alarmed is the industry that on Thursday, Sajjan Jindal, vice-chairman & managing director of JSW Steel, sought anti-dumping duties on steel imports from China.
The declining global demand has brought about a major downturn in steel industry globally, leading to production cuts by global as well as Indian companies.
No dent
•Reimposition of 5% import duty fails to check cheap imports
•Global prices are still lower by $100 than domestic prices
•China to remove 5% export tax on flat steel products from Dec
•Industry wants 15-20% import duty, calls for dumping duty