Prices of steel globally have been on a downward slump due to a glut in lieu of impending tariffs to be imposed on steel imports into the US.
Speaking at the Indian Steel and Trade Conference, the Union Minister for Steel, Chaudhary Birender Singh, said, “Industry representatives have said that globally the prices of steel have come down by ₹ 7,000 a tonne - ₹ 8,000 a tonne over the last 15-20 days. This is on the back of building up of over capacity and the prices are likely to remain under pressure.”
Singh said that the US has imposed a 25 per cent tariff on steel imports, rendering them uncompetitive. This has lead to fears of cross-dumping of steel products into India from countries that originally had supplies targeted to the US.
The tariffs are to be effective August this year and the Indian Government has been negotiating with the US to mitigate their impact.
The Steel Ministry is said to have suggested two options to the Ministry of Commerce whose officials are slated to hold another round of meetings with the United States Trade Representative (USTR).
The first is to have a 25 per cent duty levied on all imported steel, and the second is to cap the quantity of steel that the US administration will allow to be imported into the country.
Cap on steel imports
The approach to put a cap on imports is being preferred by the domestic industry as it allows 75 per cent of the steel to be consumed in the US and just 25 per cent to be left for a possible dumping into other countries.
Effectively, USTR could consider the annual steel imports as a reference point and could put a cap on allowing imports up to 75 per cent of the reference quantity for the time period the duty is enforced.
Stating the current position, Singh said, “The government is monitoring developments and keeping a watch. We will take appropriate interventions when required.”