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With little respite in sight from burgeoning steel imports, the Centre is planning to fix the minimum import price for various steel products. The Steel and Commerce Ministries are working in close coordination, and the decision is expected to be announced in a few days, said sources close to the development.
Steel prices have fallen sharply over the past few months and international steel companies are offering deep discount to capture Indian markets.
Safeguard duty In June, the government introduced a safeguard duty of 20 per cent on HR (hot rolled) coil imports of 600 mm and above for a period of 200 days. However, there was little relief from the surging imports.
In the first eight months of the fiscal, imports were up 35 per cent at 7.4 million tonnes, against 5.5 million tonnes in the same period last year. However, in November, it was down 7 per cent at 764,000 tonnes (821,000 tonnes) even as non-alloy steel imports were up 16 per cent at 583,000 tonnes (500,400 tonnes), as importers switched over to importing full-hard CR (cold rolled) coils to avoid the 20 import duty.
Speaking to BusinessLine , Seshagiri Rao MVS, Joint Managing Director, JSW Steel, said the industry has approached the government to fix a minimum support price for the entire supply chain to curtail imports rather than focus on particular products where shipments are rising.
Fall in imports The fall in domestic steel demand could also be one of the reasons why the imports dipped in November, said an analyst. With falling steel prices, the sentiments turned low in the last two months, as the user industry turned cautious, said Rao. The user industry is trying to trim inventory loss by stocking up steel in advance, he added.
Notwithstanding falling demand and rising imports, iron ore prices in India have bucked the global trend and witnessed a sharp increase. NMDC hiked iron ore fines (used by steel companies) to ₹1,560 a tonne from ₹1,460 a tonne while reducing that of lumps (higher grade iron ore) by ₹300 to ₹1,800 a tonne.
International iron ore prices fell 27 per cent to $40 a tonne in November and declined further to $38 on Friday.
“If one applies the royalty and cess on NMDC prices, the difference between Indian and international iron ore price is about 33 per cent,” said Rao.
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