Rising global steel prices make anti-dumping duty redundant
8 May 2017
The protection against imports given to domestic steel companies has become redundant with international prices rising above the base price prescribed in the anti-dumping duty.
The development has exposed steel companies, reeling under high debt, to competition from international producers, at a time when demand is set to grow on the back of the government’s plans to spend Rs 3 lakh crore in infrastructure this fiscal.
The Directorate General of Foreign Trade recommended a base price of $489 a tonne on HR coil imports from China; the prevailing provisional anti-dumping duty price is fixed at $478 a tonne.
If the imported steel price is above the base price that triggers an anti-dumping duty, Indian buyers have to pay only the import duty of 12.5 per cent.
Steel prices in China jumped to $500 a tonne last month due to sharp rise in coking coal prices. However, it fell back to $470-480 a tonne as coking coal exports from Australia are reviving after tropical cyclone Debbie disrupted supply in March.
Nikunj Turakhia, President, Steel Users Federation of India, said imports can now be made for specific products from select countries if Indian producers kept prices artificially high.
“We expect steel prices to come down in the coming months as prices of coking coal and iron ore have eased. India, which has an excess of HR steel coil production, has exported 7 lakh tonnes at $430-440 a tonne to Vietnam in the past few months due to weak domestic demand,” he added.
The price of coking coal had doubled in April to about $310 a tonne. Prices may soften, but are unlikely to touch the low of $75 a tonne as it did in January last year.
H Shivramkrishnan, Director (Commercial), Essar Steel, said that unlike a year ago, the ability of exporting countries to dump steel in India is limited as raw material prices have gone up. Besides, he said, the government is proactive and watchful.