 "Health of domestic steel industry critically depends on government's decision on MIP: ICRA")
With earlier easing of import protection on many products, industry pleads for more and longer protection, saying this isn’t enough
The central government on Tuesday imposed an anti-dumping duty (ADD) for six months on import of hot-rolled (HR) steel products from six nations, including China and South Korea, to shield domestic manufacturers.
The ADD is $474-557 a tonne on import in this category from China, Japan, South Korea, Russia, Brazil and Indonesia.
This comes after it extended the minimum import price (MIP) norms on select steel products but removed safeguard duties from 37 others.
There earlier were 173 products under MIP; this was cut last week to 66. Products which had safeguard duties or ADD were removed from the new list. The range of prices, $341 to $752 a tonne, was not changed.
This was followed by removal of safeguard duty from another 37 products, such as flat rolled and HR steel.
Imposed on the recommendation of the Directorate General of Anti Dumping (DGAD), the ADD would be in force till February 7, 2017. A duty of $474 a tonne was imposed on import of HR flat products of alloy or non-alloy steel of a width up to 2,100 mm and thickness up to 25 mm from Korea and Japan.
Korean firms attracting the ADD are Hyundai Steel Company and Posco. Three Japanese companies — JFE Steel Corp, Nippon Steel and Sumitomo Metal Corp — also feature in the list.
A similar ADD was slapped on import from China, the exporter company being Angang Steel Company and Zhangjiagang. Similar import from Indonesia, Russia and Brazil also attracted $474 a tonne duty.
HR flat products of alloy or non-alloy steel not in coils (commonly known as sheets and plates) of a width up to 4,950 mm and thickness up to 150 mm imported from Korea, Japan, China, Russia, Brazil and Indonesia would attract an ADD of $557 a tonne.
DGAD "has come to the provisional conclusion that the subject goods have been exported to India from the subject countries below normal value (and) the domestic industry has suffered material injury", went the notification.
Steel manufacturers are not ahppy, saying all this is most inadequate. The pruning of the list for MIP and the conditional safeguard duty on only select products, plus inadequate ADD, was not enough protection against cheaper import, they stated.
The weekly domestic landed price in Mumbai of HR sheets is Rs 31,000-32,000 a tonne ($464-479), while Chinese mills offer these at $370-375 a tonne.
HR sheets, which go into the making of cold-rolled coils, got some respite in the ADD now imposed for six months. However, it might not suffice for Tata Steel, JSW Steel, Steel Authority of India and Bhushan Steel, whose cold-rolled steel business might be affected. Cold-rolled or flat steel is widely used in the manufacture of automobiles.
"The ADD is welcome but the duration of six months will bring no stability for the industry," said Sanak Mishra, secretary-general of Indian Steel Association.
In 2015-16, India consumed 5.8 million tonnes of flat steel and 108,000 tonnes of non-flat products.
"The MIP extension for two months on a pruned list of 66 products is an interim measure because demand and supply will not undergo a major change in this period. The government is buying time before it rolls out lasting measures to fix the issue of cheap steel imports," Jayanta Roy, senior vice-president at rating agency ICRA, told this newspaper.
"Since ADD has been imposed on HR sheets a similar duty on cold-rolled products should also be on its way," Mishra hoped. There is a recommendation for a provisional ADD on the latter, which face no MIP or safeguard duty.
"The MIP and safeguard duty are product- and country-specific. There needs to be a measure that will cover the value chain and anti-dumping looks like the right measure," said Ritesh Shah, senior analyst with Investec Securities. "If not across the value chain, secondary producers will find it difficult to survive."
Indian steel makers are struggling with muted demand growth. "Prices are not likely to rise unless steel consumption improves in construction and infrastructure, where projects are stalled by lack of funds," said Charlotte Rao, steel analyst at S&P Global Platts.
"ADD is a trade remedial measure and also compliant with the World Trade Organization’s rules. About 90 per cent of flat products can be made in India," said Mishra.
The central government on Tuesday imposed an anti-dumping duty (ADD) for six months on import of hot-rolled (HR) steel products from six nations, including China and South Korea, to shield domestic manufacturers.
The ADD is $474-557 a tonne on import in this category from China, Japan, South Korea, Russia, Brazil and Indonesia.
This comes after it extended the minimum import price (MIP) norms on select steel products but removed safeguard duties from 37 others.
There earlier were 173 products under MIP; this was cut last week to 66. Products which had safeguard duties or ADD were removed from the new list. The range of prices, $341 to $752 a tonne, was not changed.
This was followed by removal of safeguard duty from another 37 products, such as flat rolled and HR steel.
Imposed on the recommendation of the Directorate General of Anti Dumping (DGAD), the ADD would be in force till February 7, 2017. A duty of $474 a tonne was imposed on import of HR flat products of alloy or non-alloy steel of a width up to 2,100 mm and thickness up to 25 mm from Korea and Japan.
Korean firms attracting the ADD are Hyundai Steel Company and Posco. Three Japanese companies — JFE Steel Corp, Nippon Steel and Sumitomo Metal Corp — also feature in the list.
A similar ADD was slapped on import from China, the exporter company being Angang Steel Company and Zhangjiagang. Similar import from Indonesia, Russia and Brazil also attracted $474 a tonne duty.
HR flat products of alloy or non-alloy steel not in coils (commonly known as sheets and plates) of a width up to 4,950 mm and thickness up to 150 mm imported from Korea, Japan, China, Russia, Brazil and Indonesia would attract an ADD of $557 a tonne.
DGAD "has come to the provisional conclusion that the subject goods have been exported to India from the subject countries below normal value (and) the domestic industry has suffered material injury", went the notification.
Steel manufacturers are not ahppy, saying all this is most inadequate. The pruning of the list for MIP and the conditional safeguard duty on only select products, plus inadequate ADD, was not enough protection against cheaper import, they stated.
The weekly domestic landed price in Mumbai of HR sheets is Rs 31,000-32,000 a tonne ($464-479), while Chinese mills offer these at $370-375 a tonne.
HR sheets, which go into the making of cold-rolled coils, got some respite in the ADD now imposed for six months. However, it might not suffice for Tata Steel, JSW Steel, Steel Authority of India and Bhushan Steel, whose cold-rolled steel business might be affected. Cold-rolled or flat steel is widely used in the manufacture of automobiles.
"The ADD is welcome but the duration of six months will bring no stability for the industry," said Sanak Mishra, secretary-general of Indian Steel Association.
In 2015-16, India consumed 5.8 million tonnes of flat steel and 108,000 tonnes of non-flat products.
"The MIP extension for two months on a pruned list of 66 products is an interim measure because demand and supply will not undergo a major change in this period. The government is buying time before it rolls out lasting measures to fix the issue of cheap steel imports," Jayanta Roy, senior vice-president at rating agency ICRA, told this newspaper.
"Since ADD has been imposed on HR sheets a similar duty on cold-rolled products should also be on its way," Mishra hoped. There is a recommendation for a provisional ADD on the latter, which face no MIP or safeguard duty.
"The MIP and safeguard duty are product- and country-specific. There needs to be a measure that will cover the value chain and anti-dumping looks like the right measure," said Ritesh Shah, senior analyst with Investec Securities. "If not across the value chain, secondary producers will find it difficult to survive."
Indian steel makers are struggling with muted demand growth. "Prices are not likely to rise unless steel consumption improves in construction and infrastructure, where projects are stalled by lack of funds," said Charlotte Rao, steel analyst at S&P Global Platts.
"ADD is a trade remedial measure and also compliant with the World Trade Organization’s rules. About 90 per cent of flat products can be made in India," said Mishra.
