Us Anti-Dumping Duty Pushes Hrc Prices To Record Low

Prices of hot rolled coils (HRC), the mother of all flat products, have dipped to a record low. Steel industry sources said HRC prices are presently hovering around the Rs 11,000 mark.

The large-scale oversupply in the domestic market is the reason behind this dramatic fall, industry sources said. "The current HRC prices are the lowest ever," steel ministry sources said. Global HRC prices have also dropped to $210-220 as compared with $240 three months back.

Last year, the main domestic producers produced around 3.8 million tonne HRC and a similar amount was produced by secondary producers. Imports were at 6 lakh tonne.

However, around 1.3 million tonne HRC was exported last year, of which around 9 lakh tonne was exported to the US alone. The total realisation from the US exports was $265 million. The higher demand in the international market, coupled with improvement in the prices, had encouraged export of HRC from modernised mills of Bokaro, Tata Steel, Essar, Ispat and Jindal Vijaynagar.

Now, with the imposition of antidumping duty by the US, the bulk of the 9 lakh tonne HRC has made its way to the domestic market. But, domestic consumption is at 6.3 million tonne.

Sources said, the dip in HR prices will also push down prices of cold rolled coils (CRC). Even eight months back, the HRC prices were at around Rs 13,000.

The anti-dumping levy will be for five years. However, the aggrieved companies can initiate review applications after the end of the year.

The US had already levied preliminary levy on Indian steel exports last year. The final levy has hit Ispat Industries the most at 43.04 per cent. The levy on Essar Steel is at 29.35 per cent. A weighted average of their levies is to be applied to other firms -- Steel Authority of India, Tata Steel, and Jindal Vijaynagar.

Under the present over capacity situation, many of the producers are considering a production cut. However, producers are making attempts to find alternate markets in west Asia, Bangladesh, Myanmar, South Africa, Mexico and Taiwan.

No impact of the US levy: Tata Steel

Tata Steel managing director B Muthuram said the recent anti-dumping levy imposed by the United States on Indian steel would have no impact on the company. The imposition of levies by the US government would not affect the fortunes of Tata Steel, the MD said, but clarified that he was not speaking on behalf of other producers.

"The company anticipated several months ago that strict anti-dumping measures would be imposed by the US government and, therefore, took alternate strategic steps to withdraw from the US and enter several new markets in growth areas all over the world," the company said in a statement issued here today.

As a result, Tata Steel will continue to produce at 100 per cent of its capacity and sell its production at ruling market prices, the company stated.