Public sector steel major SAIL has asked the government to evolve a time-bound anti-dumping duty mechanism to curb the rising cheap steel imports at a time when profits are under pressure due to falling prices.
"Import of hot rolled (HR) coils has increased by 20-22 per cent and market price for this item has direct link with the imported price. Quantity may not be substantial but the import price sets the benchmark," SAIL chairman SK Roongta told PTI.
"What we want is that anti-dumping duty mechanism should be strong...It should be a time-bound action and on real-time basis," he said, adding dumping may not be an "immediate threat" but it can become because of the huge unutilised capacity globally.
The quantum of import of HR coils--a vital steel input for sectors like auto--could not be immediately ascertained. Steel imports have increased by 11 per cent to 4.58 million tonne in the April-November of this year.
SAIL and others have already made representations to the Steel Ministry about the trend of companies resorting to cheap steel imports. "As long as foreign players are pricing it fairly, we have no problem, but selling at throw-away price puts lots of pressure on the domestic producers," Roongta said.
The Steel Ministry had sought imposition of 10 per cent import duty on arrivals of such items, a demand which was not conceded by the Finance Ministry. Producers like Essar, Ispat etc had also sought levy anti-dumping and safe guard duty on such imports, but that too was not met with.
The domestic steel industry continues to face threats from cheap import from countries like China and Ukraine, which are shipping their goods at prices as low as $400 a tonne to India where rates are hovering around $500-550.
Roongta also informed that domestic consumption is poised to grow in double-digits by the end of this fiscal, which will further attract global players to ship their goods here.
"Steel demand till November has grown by about 8 per cent (April-November). If it grows like this I think it can again touch double-digit growth," he added.
Cheap steel imports have been putting pressure on domestic prices since the past one year.
The trend, if not checked, can continue to add pressure on the margins of the domestic companies.
"If supply in the domestic market is more, it will naturally impact something at least," Roongta replied when asked if the current price structure will continue to hurt the margins of the domestic industry.
Globally, steel prices had softened to $400 a tonne in October-December last year from the $1,150-1200 in January-August 2008, due to demand slump following the onset of the global economic turmoil.
The prices since then saw a see-saw trend, with a recovery in the first half, and then again falling due to the fear of over capacity in the Chinese steel mills.
