Steel body opposes safeguard duty on HR coils

Producers of cold-rolled steel, used widely by auto and housing sectors, have opposed the move to impose safeguard duty on certain flat steel items, saying the proposal is based on "misrepresentation of facts".     

Under the aegis of the Cold Rolled Steel Manufacturers Association (Corsma), the producers have written a letter to Commerce Minister Kamal Nath, demanding the proposed duty may not be levied as it will have an adverse impact on downstream industries which import the commodity at competitive prices.     

The Directorate General of Safeguards (DGS) last month favoured a safeguard duty of 25 per cent on hot-rolled coils, a vital steel item which is processed into cold-rolled (CR) and galvanised items, shipped to India below $600 a tonne.     

Corsma, the apex association of secondary steel makers like Uttam Galva and Bhushan Steel, however, has opposed it on the pretext that the petitioners furnished wrong information to the government with regard to HR imports and its pricing.     

"The recommendation by DGS are based on misrepresentation of facts by the petitioners and without the views of other interested parties (about) its adverse impact on the economy," Corsma Executive Director S C Mathur said.

Steel makers Essar and Ispat Industries had filed a petition for imposition of the safeguard duty and the same was supported by SAIL and JSW Steel.

Questioning the rationale behind the proposed duty, Corsma said a protection of USD 200 a tonne to HR makers would result in increased imports of finished CR and engineering goods that would damage the local industry.     

"It is therefore imperative that if a protection of USD 200 per metric tonne is provided to HR coil producers, the same must be extended to the downstream industries to avoid bulk imports of finished steel products...," Corsma said.

According to the Association, the domestic HR producers are already protected by a customs duty of five per cent besides import curb on the commodity after it was brought under the restricted list of items for imports.     

Not buying the contention that import of HR coils has surged over the last few months, Corsma said the facts furnished by petitioners are factually "incorrect and misleading" as per data published by Steel Ministry's Joint Plant Committee.     

The imports actually declined by 24 per cent in 2008-09 as compared to the year-ago period due to higher domestic supplies, it said, adding the imposition of safeguard duty at a stage when the elections are underway would be a violation of the Election Commission's Code of Conduct.
Questioning the rationale behind the proposed duty, Corsma said a protection of $200 a tonne to HR makers would result in increased imports of finished CR and engineering goods that would damage the local industry.     

"It is therefore imperative that if a protection of $200 per metric tonne is provided to HR coil producers, the same must be extended to the downstream industries to avoid bulk imports of finished steel products...," Corsma said.     

According to the Association, the domestic HR producers are already protected by a customs duty of five per cent besides import curb on the commodity after it was brought under the restricted list of items for imports.     

Not buying the contention that import of HR coils has surged over the last few months, Corsma said the facts furnished by petitioners are factually "incorrect and misleading" as per data published by Steel Ministry's Joint Plant Committee.     

The imports actually declined by 24 per cent in 2008-09 as compared to the year-ago period due to higher domestic supplies, it said, adding the imposition of safeguard duty at a stage when the elections are underway would be a violation of the Election Commission's Code of Conduct.