Govt to impose minimum import price on steel items to protect local market
The move is the strongest possible measure to shield steelmakers from the onslaught of cheap imports that has severely affected the industry.
The move is the strongest possible measure to shield steelmakers from the onslaught of cheap imports that has severely affected the industry and comes after intense lobbying by the steel industry.
In a late evening notification on Friday, the Director General of Foreign Trade (DGFT) — an arm of the Union commerce ministry — notified a price of $445 to 500 per tonne across a range of hot rolled flat products of steel. For semi-finished products like slabs, blooms, ingot and billets, the MIP will range from $341 to $362 per tonne.
The MIP on cold rolled products will be between $500 and $560 per tonne. The MIP on steel will be valid for six months. The commerce ministry will review the decision thereafter. The MIP which follows a string of measures taken by the government to protect primary steel producers is expected to help them tackle competition from imports.
Domestic HR coil prices have plunged since the 20% safeguard duty was imposed in September 2015 on steel imports last year.
Prices dropped to $340-350 per tonne and in some cases imports were coming at prices of even $ 290 per tonne. It was much in line with what a number of analysts had predicted when safeguard duty were imposed that import prices would drop further.
As a result, domestic prices had to be lowered to match imported steel prices, adding to the woes of the beleaguered industry.
As Shivramkrishnan, Chief Commercial Officer, Essar Steel India, said: “This measure will ensure a level-playing field to Indian steel industry which has been adversely affected by dumped imports from various sources. We are thankful to the government of India and hope this will suitably address the concern of surging cheap imports.”
Commenting on the government decision, Ravi Uppal, MD, JSPL, said: “In last one year imports have been rising and they have been coming at a price level that was not sustainable for the local industry. This move will give domestic industry a chance to bounce back.”