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With a sharp fall in international steel prices, manufacturers have sought Government intervention to restrict large-scale imports by imposing stiff trade barriers. Steel companies are also concerned about poor quality steel products being dumped into India.
The excess capacity build-up in China amid weak demand has led to steel being dumped into India at a lower price.
In addition, the sudden depreciation of ruble to 62 from 32 against the dollar has made imports from Russia cheaper. Steel products can also be imported from Japan and South Korea free under the free trade agreement. Steel imports into India rose 137 per cent in December to 1 million tonne (mt). In the first three quarters of this fiscal, imports were higher by over 60 per cent to 6.51 mt.
Imports are expected to increase further as steel prices in the international markets have dropped by $70 (₹4,340) a tonne in the last four months.
The industry has sought the Government to increase import duty on TMT/rebars, stainless steel, hot and cold rolled coils to 10 per cent from 7.5 per cent.
The cost of steel production in India has remained on the higher side with the price of iron ore, a key raw material, moving on a divergent trend, compared with international markets. In the last one year, iron ore prices in India have gone up by 14 per cent, while it has dropped by 50 per cent in international markets. JSW Steel, which has an annual capacity of 10 mt, imported 2.4 mt of iron ore in the December quarter alone as the company has no captive mines.
The rise in cost of production, coupled with the fall in demand, has hit steel companies hard.
Steel demand in India was up just 1.4 per cent during April-December to 55.24 mt compared with 54.50 mt a year ago, according to the Joint Plant Committee, part of the steel ministry.
Jayant Acharya, Director (Commercial and Marketing), JSW Steel, said many countries such as Brazil, the US and South Korea have imposed import restrictions to protect their domestic industry.
Besides dumping, he said, the Government has to ensure that the quality norms are implemented at the Customs level. While the quality norms for 15 products are now being followed at ports after the industry intervention, the Government is yet to finalise quality parameters for 21 steel products.
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