Metal exports may continue to fall on European Union’s protectionist policies

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Published: March 2, 2019 2:02:20 AM

Meanwhile, EEPC would be organising its flagship International Engineering Sourcing Show ( IESS) from March 14 to March 16 in Chennai, where 300 companies from India and abroad would be participating. Malaysia would be the partner country in IESS, an EEPC official said.

Cumulatively, the decline was 13.93% (around $ 8,022.3 million) in first 10 months (April-January 2019) against the same period last fiscal.

EEPC India, the apex body of engineering exporters, on Friday said exports of key metals may continue to fall due to protectionist policies of the European Union coupled with a shutdown of Sterlite Copper’s Tuticorin plant. The EU has taken a protectionist policy for import of steel due to which India’s exports of primary steel fell by 10.7% in January 2019 and 14% in the first 10 months of the current fiscal. Exports of copper and copper products dropped by 76.6% in January 2019 and 69.6% in the first 10 months.

Outwards shipments of zinc and products declined by 17.6% in January 2019 and 29.7% in the first ten months of the fiscal. Despatches of tin and products fell by 54.8% in January 2019 and 17.4% in the cumulative months of the current fiscal, an EEPC India report said.
” The cumulative impact of the fall in these four product lines is $3.542 billion for the first ten months (without any growth). Had this figure been added to the $65 billion for the April-January period of the current fiscal, our overall growth of engineering exports would have shot up to over 11.2% than the current growth rate of over 5.5%,” Ravi Sehgal, EEPC India chairman said.

He said for the fall of exports of these metals, there was a fall in the exports by 10.73 % ($ 817.82 million) in January 2019 against the exports that were made during January 2018. Cumulatively, the decline was 13.93% (around $ 8,022.3 million) in first 10 months (April-January 2019) against the same period last fiscal.

The domestic price realisation is far better than external prices. Further, global price trends also indicate that the Chinese producers have dropped steel prices between 10% and 15% in various categories and this has negatively impacted India’s steel exports.
“Decline in growth has been observed in Belgium (-17.83%), Indonesia (-27.88%), South Korea (-17.57%), Malaysia (-28.83%) and USA (-57.54%). It is clear from these facts that the protectionist policies adopted by EU, US are also responsible for the decline in exports of steel,” Shegal said.

Besides, Indian domestic refined copper production has fallen significantly during the first half of FY 18 mainly due to the shutdown of the 400 KT, Tuticorin smelter of Sterlite which accounted for 40% of the country’s smelting capacity. Recently, the Supreme Court refused to allow Vedanta to reopen Sterlite Copper’s Tuticorin plant and therefore the trend of lower exports of copper and products will continue.
“Domestic industry rely heavily on imports of copper concentrate from far off countries, particularly from South Africa in a big way. This really increases the cost of production. The duty on the copper concentrate is 2.5% presently whereas finished goods with use of copper concentrate is coming at zero duty. There is also an inverted duty structure. Government could consider removal of this duty in order to help the industry become globally competitive”, Shegal said.

Meanwhile, EEPC would be organising its flagship International Engineering Sourcing Show ( IESS) from March 14 to March 16 in Chennai, where 300 companies from India and abroad would be participating. Malaysia would be the partner country in IESS, an EEPC official said.

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