Indian steel makers stay protected from cheap imports as anti-dumping duties stay

By: | Published: May 13, 2017 6:16 AM

No import threat now, but anti-dumping duties to help local firms if global prices fall.

The potential beneficiaries of the anti-dumping duties include public-sector SAIL, Tata Steel and JSW Steel.

Continuing with the policy of protecting domestic steel-makers from cheap imports, the government has imposed definitive anti-dumping duties on specified HR coils, plates and sheets from a clutch of companies from half-a-dozen nations, including China, Japan, Korea, Russia and Indonesia. An official notification issued late on Thursday stated that the duties will be in effect for five years beginning August 8, 2016 (when provisional duties were put on these items). However, industry sources said that since landed prices of these items — including freight and customs duty of 12.5% — are now ruling higher than the reference prices, $478-561 per tonne, set by the government, the duties won’t be applicable immediately. However, these imposts will come to the domestic companies’ help as and when the global prices, which have recently firmed up due to rising input costs, fall.

The potential beneficiaries of the anti-dumping duties include public-sector SAIL, Tata Steel and JSW Steel. Thanks to the provisional anti-dumping duties and a minimum import prices on 173 products including HR coil that existed for several months since February last year, domestic steel makers have improved their balance sheets in recent quarters. Domestic HR coil prices are now ruling at $610/tonne. In 2016-17, India’s steel imports fell by an annual 37% to 7.4 million tonne (mt) while exports increased by 102% to 8.2 million tonne.

Accepting the recommendations of the Directorate general of Anti-Dumping (DGAD), which in its final findings found that predatory imports were causing material injury to the domestic steel firms in the period of probe, the finance ministry has kept the reference rate for imports of HR coils in the range between $478-489 per tonne.

For plates/sheets, it has been kept at $561 a tonne. The actual duties are the difference between the reference price and the landed t price of imports.

Companies to be affected by the duties include Hyundai Steel, POSCO and Samsung C&T of South Korea, while Japan’s Honda Trading Corp, Mitsui & Co, Uttam Galva International, Nippon Steel, Sumitomo Corp, Toyoto Tshusho Corp and Marubeni-Itochu Steel would also come under its purview. From China, the companies to be impacted include Jiangsu Shangang, Xinsha International, Burwill Resources, Lu Qin, GS Global and Steelco Pacific.

Faced with rising imports amid anaemic domestic demand, the government had in February, 2016 last year initially imposed MIP on 173 products in the range of $341-752/tonne. After pruning the MIP list in the interim, in February, 2017, these barriers to imports have been removed, in the light of the protests from exporting countries over their WTO-incompatible nature.

You may also like to watch this video

Recently, the Cabinet approved a policy that mandates use of domestic steel for public-sector infrastructure projects, in what could give protection to the domestic steel industry, without raising the hackles of the WTO. With huge infrastructure investments planned in the state sector — the budget outlay for development in 2017-18 itself is `3.96 lakh crore — the move to mandate purchase of domestic steel by state-run projects would boost the business for local steel companies, including private-sector Tata Steel and JSW Steel.

Get live Stock Prices from BSE and NSE and latest NAV, portfolio of Mutual Funds, calculate your tax by Income Tax Calculator, know market’s Top Gainers, Top Losers & Best Equity Funds. Like us on Facebook and follow us on Twitter.

Switch to Hindi Edition