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  1. Minimum import price for steel may be extended by six months

Minimum import price for steel may be extended by six months

The minimum import price (MIP) for steel imposed in February for six months could be extended by another six months from August 31, the current date of expiry. Heeding the demand of primary steelmakers, the steel ministry has already recommended to the Prime Minister’s Office (PMO) extension of the MIP, sources said. India had imposed […]

By: | Raipur | Published: July 5, 2016 6:41 AM
Heeding the demand of primary steelmakers, the steel ministry has already recommended to the Prime Minister’s Office (PMO) extension of the MIP, sources said. Heeding the demand of primary steelmakers, the steel ministry has already recommended to the Prime Minister’s Office (PMO) extension of the MIP, sources said.

The minimum import price (MIP) for steel imposed in February for six months could be extended by another six months from August 31, the current date of expiry.

Heeding the demand of primary steelmakers, the steel ministry has already recommended to the Prime Minister’s Office (PMO) extension of the MIP, sources said.

India had imposed the tariff measure on 173 products to rein in cheaper imports from China, Japan and Korea among others in the range of $341-$752 per tonne. “I think that it should be extended,” steel secretary Aruna Sundararajan told FE, echoing the voice of the industry which believes that had MIP not been imposed, the steel industry’s survival would have been at stake.

Tata Steel managing director TV Narendran also said MIP should “certainly” continue in India, particularly since the international market for steel is passing through a turmoil. “MIP does stop people from selling steel in India at a loss. Before MIP, most of the companies were selling steel in India at a loss, never at a competitive price,” he said.

“Our view is that if anybody wants to participate in India’s growth, they should come and invest in India. We have no problem in competition. India is one of the countries which gives 100% ownership and anyone can come and invest here with 100% ownership, which many countries do not allow,” Narendran added.

Jindal Steel & Power chairman Naveen Jindal also pitched for continuation of MIP on steel as it provided the much-needed relief to the domestic industry that was reeling under severe stress due to imports from China and other surplus nations, and other factors, including anaemic demand. “MIP should definitely continue. If it doesn’t, the Indian steel industry would be badly impacted,” he said.

The industry is not unnecessarily worried over raising the price range of the MIP. This is because steel price, particularly hot-rolled coil prices, had never gone up to the MIP level in India even as the world price went higher. Narendran said this was because there is enough capacity in India. The steel price will continue to be determined by demand and supply, he said.

However, the industry has asked for some alteration in the list of the products now covered under the MIP which the steel ministry is currently considering.

Aimed at bailing out the domestic steel industry reeling under severe stress for the last two years due to imports at predatory prices, subdued demand and poor prices, the government in the recent past extended a great deal of support to it, starting with raising rate of basic customs on both flat and non-flat steel to 15% from 10% in the Budget for 2016-17.

It had also hiked the import duty in August 2015 on flat steel from 10% to 12.5%, long steel from 7.5% to 10% and semi-finished steel from 7.5% to 10%. The government had also imposed in June 2015 an anti-dumping duty for five years on imports of certain variety of hot-rolled flat products of stainless steel from China ($309 per tonne), Korea ($180 per tonne) and Malaysia ($316 per tonne).

Further, the government imposed a safeguard duty of 20% in March 2016 on hot-rolled flat products of non-alloy and other alloy steel, on coils of width of 600 mm or more.

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