Govt slaps anti-dumping duty on cold-rolled flat steel products

Less than a fortnight after imposing anti-dumping duty on hot-rolled flat steel products was imposed, the Finance Ministry has extend a similar levy on another grade of steel — cold-rolled flat products.

Continuing its protectionist approach towards the domestic steel industry, the government has imposed provisional anti-dumping duty on cold-rolled flat products of steel imported from China, South Korea, Japan and Ukraine, for six months.

Cold-rolled flat products of steel are used in sectors such as automotive, appliances, furniture, electrical panels, general engineering, capital goods, construction, packaging including drums and barrels, coating and plating including galvanising, colour coating, tinplates etc.

This Revenue Department move has come less than a fortnight after the Designated Authority in the Commerce Ministry recommended levy of provisional anti-dumping duty. The anti-dumping duty imposed is difference between $ 594 per tonne and “landed value” in case of specified producers from these four countries. In case of some producers, a ‘Nil’ rate has also been specified by the Revenue Department.

Essar Steel India Ltd, Steel Authority of India Ltd, JSW Steel Ltd and JSW Steel Coated Products Ltd had jointly filed the petition seeking anti-dumping duty on cold-rolled flat products of steel from these four countries.

According to steel industry officials, with the minimum import price on 66 products extended for two months in early August, the anti-dumping duty on hot-rolled flat steel products and the same on cold-rolled steel products, the entire gamut of steel imports have been covered.

The government has come out with these measures so that the domestic industry remains competitive after steel imports shot up 20 per cent year-on-year at 11.208 million tonne in 2015-16.

When minimum import price was first levied in February 2016, it helped bring down imports. During April-July 2016, total steel imports have come down to 2.39 million tonnes or 34 per cent lower than the same period last year.

Domestic production which grew 3.7 per cent to 35.238 million tonne during April-July 2016 has managed to substitute falling imports. But, steel consumption has largely remained stagnant at 26.18 million tonnes during the period.

Steel stocks As the anti-dumping duty on cold-rolled flat steel products was expected, shares of domestic steelmakers did not react much to the development.

“The positive impact had been factored in by the market. Therefore, there was not much action on the trading floor with the steel stocks on Thursday,” a Mumbai-based analyst said.

On Thursday, shares of JSW Steel shares closed 0.45 per cent higher at ₹1,779.95, Steel Authority of India Ltd closed 0.1 per cent lower at ₹48.1, Tata Steel closed 1.06 per cent lower at ₹ 387.20 while Jindal Steel and Power Ltd closed 4.02 per cent higher at ₹85.45.

However, stocks of steelmakers have rallied over the last one year due to the policy decisions that have kept them competitive against imports.

In the last one year, Tata Steel’s shares rose 53 per cent, JSW Steel’s share price has grown 80 per cent, Jindal Steel and Power Ltd’s stock price rose 20 per cent and only SAIL’s share price has slumped by 16 per cent.

COMMENT NOW