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Steel Ministry to double import duty to counter Chinese steel dumping

Chinese imports now account for nearly one-third (33%) of India’s total steel imports.

Published

3 months ago

October 7, 2024

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The Indian Steel Ministry has proposed doubling the basic customs duty (BCD) on steel imports from the current 7.5% to 15%, citing a significant surge in imports from China. This recommendation, aimed at protecting domestic steel manufacturers, was detailed in a letter sent to the Finance Ministry by Union Steel Secretary Sandeep Poundrik. The ministry’s internal assessment indicates that Chinese imports now account for nearly one-third (33%) of India’s total steel imports, posing a threat to local industry dynamics.

This is the first time the Steel Ministry has officially acknowledged the sharp rise in Chinese steel imports, which industry experts have labelled as “dumping.” The letter compares India’s situation to similar actions taken by the European Union and the United States, which have implemented safeguards to counter unfair trade practices.

The Ministry’s report highlights that many new steel capacities in the region are driven by Chinese investments aimed at export markets like India. It also raises concerns about steel shipments being diverted from ASEAN nations, particularly Vietnam, which benefits from zero customs duty under the India-ASEAN Free Trade Agreement (FTA).

The letter also points to the misuse of India-ASEAN FTAs, which are being leveraged to route cheaper Chinese steel through South Asian nations. “The current import price of steel products from China is significantly lower than domestic prices even with a 7.5% BCD. Our analysis shows that even if the duty is raised to 12.5%, Chinese steel would still undercut domestic prices,” the Steel Secretary noted.

In September 2024, the average price of hot rolled coils (HRC) in India stood at Rs 48,200 per tonne, while similar steel from China was priced at $462 per tonne, and from South Korea at $500 per tonne, according to market consultancy BigMint.
India has been a net steel importer in FY24, with imports rising by 34% to reach 3.72 million tonnes (mt) in the first five months of the fiscal year (April-August). The trade deficit for this period widened to Rs 149.11 billion, with HRC and cold rolled coils (CRC) being the primary imported categories.

The letter underscores that despite increased domestic steel production, rising imports are displacing locally produced steel, leading to market disruptions.
The Steel Ministry emphasised the need for higher import duties to safeguard domestic investments and prevent potential losses in the sector. Steel, with its significant multiplier effect on GDP (1.4x) and employment (6.8x), is a crucial component of the Indian economy. The letter warns that nearly Rs 75,000 crore of capital expenditure is “under threat” due to disruptions in the investment cycle.

The ministry’s analysis also showed that ASEAN countries currently consume around 75 mt of steel—25 mt from imports and 50 mt from domestic production. With steel production capacities expected to rise from 78 mt to 104 mt in the coming years, Chinese exports are likely to flood these markets and could be redirected to India through FTAs.

The Steel Ministry has urged the Finance Ministry to consider these factors and implement higher duties to protect the domestic steel industry from the growing influx of low-priced Chinese imports.
(Business Line)

Related Topics:Coking coal India Ministry of Steel Raw materials

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Jefferies’ Optimism Fuels Cement Stock Rally

The industry is aiming price hikes of Rs 10-15 per bag in December.

Published

3 weeks ago

December 4, 2024

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Cement stocks surged over 5% on Monday, driven by Jefferies’ positive outlook on demand recovery, supported by increased government capital expenditure and favourable price trends.

JK Cement led the rally with a 5.3% jump, while UltraTech Cement rose 3.82%, making it the top performer on the Nifty 50. Dalmia Bharat and Grasim Industries gained over 3% each, with Shree Cement and Ambuja Cement adding 2.77% and 1.32%, respectively.

“Cement stocks have been consolidating without significant upward movement for over a year,” noted Vikas Jain, head of research at Reliance Securities. “The Jefferies report with positive price feedback prompted a revaluation of these stocks today.”

According to Jefferies, cement prices were stable in November, with earlier declines bottoming out. The industry is now targeting price hikes of Rs 10-15 per bag in December.

The brokerage highlighted moderate demand growth in October and November, with recovery expected to strengthen in the fourth quarter, supported by a revival in government infrastructure spending.
Analysts are optimistic about a stronger recovery in the latter half of FY25, driven by anticipated increases in government investments in infrastructure projects.
(ET)

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Steel Ministry Proposes 25% Safeguard Duty on Steel Imports

The duty aims to counter the impact of rising low-cost steel imports.

Published

3 weeks ago

December 4, 2024

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The Ministry of Steel has proposed a 25% safeguard duty on certain steel imports to address concerns raised by domestic producers. The proposal emerged during a meeting between Union Steel Minister H.D. Kumaraswamy and Commerce and Industry Minister Piyush Goyal in New Delhi, attended by senior officials and executives from leading steel companies like SAIL, Tata Steel, JSW Steel, and AMNS India.

Following the meeting, Goyal highlighted on X the importance of steel and metallurgical coke industries in India’s development, emphasising discussions on boosting production, improving quality, and enhancing global competitiveness. Kumaraswamy echoed the sentiment, pledging collaboration between ministries to create a business-friendly environment for domestic steelmakers.

The safeguard duty proposal aims to counter the impact of rising low-cost steel imports, particularly from free trade agreement (FTA) nations. Steel Secretary Sandeep Poundrik noted that 62% of steel imports currently enter at zero duty under FTAs, with imports rising to 5.51 million tonnes (MT) during April-September 2024-25, compared to 3.66 MT in the same period last year. Imports from China surged significantly, reaching 1.85 MT, up from 1.02 MT a year ago.

Industry experts, including think tank GTRI, have raised concerns about FTAs, highlighting cases where foreign producers partner with Indian firms to re-import steel at concessional rates. GTRI founder Ajay Srivastava also pointed to challenges like port delays and regulatory hurdles, which strain over 10,000 steel user units in India.

The government’s proposal reflects its commitment to supporting the domestic steel industry while addressing trade imbalances and promoting a self-reliant manufacturing sector.

(ET)

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India Imposes Anti-Dumping Duty on Solar Panel Aluminium Frames

Move boosts domestic aluminium industry, curbs low-cost imports

Published

3 weeks ago

December 4, 2024

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The Indian government has introduced anti-dumping duties on anodized aluminium frames for solar panels and modules imported from China, a move hailed by the Aluminium Association of India (AAI) as a significant step toward fostering a self-reliant aluminium sector.

The duties, effective for five years, aim to counter the influx of low-cost imports that have hindered domestic manufacturing. According to the Ministry of Finance, Chinese dumping has limited India’s ability to develop local production capabilities.

Ahead of Budget 2025, the aluminium industry has urged the government to introduce stronger trade protections. Key demands include raising import duties on primary and downstream aluminium products from 7.5% to 10% and imposing a uniform 7.5% duty on aluminium scrap to curb the influx of low-quality imports.

India’s heavy reliance on aluminium imports, which now account for 54% of the country’s demand, has resulted in an annual foreign exchange outflow of Rupees 562.91 billion. Scrap imports, doubling over the last decade, have surged to 1,825 KT in FY25, primarily sourced from China, the Middle East, the US, and the UK.

The AAI noted that while advanced economies like the US and China impose strict tariffs and restrictions to protect their aluminium industries, India has become the largest importer of aluminium scrap globally. This trend undermines local producers, who are urging robust measures to enhance the domestic aluminium ecosystem.

With India’s aluminium demand projected to reach 10 million tonnes by 2030, industry leaders emphasize the need for stronger policies to support local production and drive investments in capacity expansion. The anti-dumping duties on solar panel components, they say, are a vital first step in building a sustainable and competitive aluminium sector.