HR steel imports up 137%, local players cry foul

Faced with an unprecedented 137 per cent increase in the import of hot rolled (HR) steel in the first half of this year, Indian steel producers are alleging a case of dumping. Under the Indian Steel Alliance, producers plan to approach the commerce ministry within the next fortnight.

The immediate affect has been on the Indian producers' sales realisation, which has declined. While the price in the local market is about Rs 21,000 per tonne of HR steel, the imported product is priced in the range of Rs 14,000 to Rs 15,500. Significantly, most of the players in the industry are increasing their HR steel consumption by almost 50 per cent every year, making the price difference crucial.

"The prices quoted by suppliers, mainly from Russia, Egypt, Ukraine and Germany, are lower than the average production costs of Indian manufacturers. They are helped by export subsidies given by their governments. And also benefit from the low import duty charges in India," said a source close to the industry.

At five per cent, the import duty in India is said to be among the lowest in the world. This helped imports increase by 60 per cent in the the first six months of the year at 1.5 million tonne. Two-third of it was HR steel at 1.07 million tonne. Two years ago, annual imports stood at only a million tonne.

Exports, on the other hand, dropped by six per cent at 1.9 million tonne. With production going up by almost 8 per cent, producers say that there is a surplus of almost one million tonne of steel in the domestic market.

But steel importers have their own take on the issue. "Certain grades of steel imported are unavialable here or are low-valued. They are mostly used in the construction industry. But the local producers have kept the prices above the international level. If prices go down, imports are sure to come down in the next six months," said an industry player.