Slump-hit steel cos for 20% import duty levy

Hit by the recent spurt in import of steel, primary steelmakers have urged the government to levy 20% import duty on steel or completely b an its imports for the next three months. During the past six months, India's steel imports have shot up by 50% to about 3 million tonne (mt) as compared to the corresponding period in the last fiscal. The steel industry is feeling the heat of competition from countries like China, Thailand and Ukraine which are allegedly dumping cheap steel here. The imports continue to remain attractive despite a depreciating rupee, the industry feels. “We have asked the government to reimpose import duty on flat steel products, especially hot rolled coils (HRC), where the industry is feeling the pinch in a depressed market. In fact, steel companies feel that HRC imports should be banned till markets stabilises,” said a senior official of a steel company who did not wish to be identified. It is understood that all the major private sector steel companies have met senior officials of the steel and finance ministries with their demand. The matter may be discussed in the Committee of Secretaries (CoS) reviewing prices of essential commodities before a decision to change the duty structure on steel is finalised, an official source said. “The conditions have entirely changed in the last 4-5 months. The demand for steel is witnessing a slump and this is prominent not only in India but across the globe. There's surplus steel available all over. Therefore, the advantages given to the domestic steel sector to counter shortages should now be restored,” said Essar Steel Holdings CEO J Mehra. He, however, refused to comment on the level of import duty that has been demanded. Other companies, however, confirmed that they have asked for a 20% import duty on HRC or a ban on imports for three months. In 2007-08, the country imported about 6 million tonne of steel to meet the growing requirement of the alloy. Currently, the demand for steel has dipped to 11.2% as against 14%-15% four months ago and the production growth in the first half of the year has been only 5.2%. Globally, steel prices have been witnessing a downturn over the past two months which in turn has boosted the imports. The actual impact these imports are yet to be felt as imports are expected to hit Indian shores in mid-October and November period. However, a recent 15% spike in the value of dollar against the rupee has reduced imports to some extent. “Stocks of steel are piling up at the warehouses and we need to do away with it. The government should come forward and help the industry at the time of distress,” said a primary steel firm official. Global steel prices have fallen to a level of $800 per tonne down from $1300-$1400 just a few months back. In the domestic market too, prices have fallen marginally.