The finance ministry has imposed anti-dumping duties on the import of hot-rolled stainless steel (HR SS) flats of grade 304 originating from China, Malaysia and South Korea. The duties imposed are in the range of USD180/t for imports from Korea to USD316/t for imports from Malaysia. Also, the government has hiked the import duty on non-alloy steel products by 2.5%. Non-alloy steel flats now command an import duty of 10% while non-alloy steel longs attract a duty of 7.5%.
The alloy steel sector (of which stainless steel is a major part) in India has been particularly vulnerable as imports have averaged 25% of the domestic production over the last few years despite having capacity utilisation of 50%-60% The non-alloy steel sector however has fared better where imports have been nearly 8% of domestic production with capacity utilisation of 80%-85%. The quantum of imports of alloy steel products has always been higher as the domestic price per tonne of alloy steel (such as 300 grade SS) is significantly higher (around 5x) than that of non-alloy steel, making import of such steel more profitable for the importer.
The current duty is applicable on HR SS; however, stainless steel players might convert HR SS into cold-rolled stainless steel to circumvent the anti-dumping duty to negate impact of the current order to some extent. However, Ind-Ra sees the possibility as low as importers prefer to import in HR form which can be customised thereafter for use in cold rolled form.
The anti-dumping duty could also have been extended to the 200 grade stainless steel as it commands a market share of more than 50% in India. However, the domestic production of the 200 grade has been higher than that of the 300 grade because the former uses a lower quantity of nickel, thus limiting its import. The bulk of imports in India were in the 300 grade stainless steel and hence the move should provide some respite for stainless steel players.
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