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Steelmakers Urge Government to Impose Temporary Tax on Cheap Imports

Industry experts suggest that the government needs to take a more proactive approach

Published

1 week ago

November 25, 2024

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India’s steelmakers, facing severe financial stress due to rising imports of cheap steel from countries like China, Japan, South Korea, and Vietnam, are calling on the government to impose a temporary tax to protect the domestic industry. The Indian Steel Association (ISA), which represents major steel producers such as JSW Steel, Tata Steel, and the Steel Authority of India (SAIL), is pushing for urgent action to curb what it sees as a flood of steel imports at predatory prices that threaten the survival of the domestic industry.

The ISA’s latest presentation to the Directorate General of Trade Remedies (DGTR), a branch of the federal trade ministry, highlights the impact of cheap imports on Indian steelmakers, particularly in key segments such as hot-rolled steel, coated steel, and steel plates. According to the ISA, these imports have displaced a significant portion of the domestic market share, leading to a loss of 17% in the hot-rolled segment, 20% in coated steel, and 19% in the plates segment. This surge in imports, particularly from countries with surplus steel production, has forced Indian mills to reduce their prices, putting additional strain on their financial health.

The ISA has also pointed out that countries like Vietnam, which was once an importer of Indian steel, have now become exporters of steel to India. This reversal in trade dynamics is contributing to the over-saturation of the Indian market with cheap steel, further exacerbating the financial difficulties faced by local producers. In response, the Indian government launched an anti-dumping investigation into steel imports from Vietnam, which is still ongoing. The ISA argues that such measures are necessary to protect the integrity of India’s domestic steel industry.

India, the world’s second-largest crude steel producer, has seen a sharp rise in steel imports, with finished steel imports reaching a seven-year high of 5.7 million metric tons between April and October of the current fiscal year. This increase in imports has led to a significant drop in the margins of Indian steelmakers, with some mills reporting losses of up to 91%. The financial stress caused by cheap imports is also affecting the ability of steelmakers to invest in new capacity expansions, raising concerns about the long-term growth prospects of the industry.

JSW Steel, India’s largest steelmaker by capacity, has already reported a third consecutive quarterly decline in profits, citing the impact of rising imports on domestic steel prices. Tata Steel and SAIL have also expressed concerns over the declining margins and reduced profitability, urging the government to step in and impose temporary safeguard duties to counter the influx of cheap foreign steel.

The ISA is lobbying for the government to implement a safeguard duty, which would temporarily increase tariffs on imported steel. This move is expected to protect domestic producers from the surge in low-priced imports and provide them with a level playing field to compete in the domestic market. The proposed safeguard duty would apply to imports from countries such as China, South Korea, Japan, and Vietnam.

The Indian government has already implemented various protective measures, including anti-dumping duties on certain steel products from China and South Korea. However, the ISA argues that these measures have not been sufficient to stem the tide of cheap imports, and a safeguard duty would offer additional protection to the struggling domestic steel industry.

Industry experts suggest that the government needs to take a more proactive approach to safeguard the interests of domestic steel producers. Without such measures, they warn that India’s steel sector could lose its competitive edge in the global market, further harming the economy.

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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

1 day 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

1 day 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

1 day 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.