Govt imposes safeguard duties on some steel imports

The Modi government has imposed a safeguard duty on certain hot rolled flat sheets and plates with effect from November 23, 2016 till May 22, 2019.
 

As in the case of hot rolled coils, the safeguard duty would be tapering, with the peak duty being 10%. Subsequently, it would taper to 8% and 6% up to 2019.

"The petition for the safeguard duty on hot rolled sheets and plates had been filed after the safeguard duty was imposed on hot rolled coils last year. The notification has just happened," a producer said.

In September 2015, the Centre had imposed a safeguard duty of 20% hot-rolled coils for a period of 200 days. This March, a tapering safeguard duty was extended till 2018 with the peak duty at 20%. The prevailing safeguard duty on hot rolled coils, however, is 18%.

Producers pointed out a provisional anti-dumping duty was already in place on hot rolled coils, sheets and plates. However, the duties had become infructuous because international prices had increased following a surge in coking coal prices, one of the key raw materials for producing steel through the blast furnace route. Spot coking coal prices which were at $90 a tonne in July have now breached the $300-mark.

International prices have moved in tandem. For instance, in hot rolled coils, the reference price for anti-dumping duty is $475 a tonne. But currently, international hot rolled coil prices are at $475 a tonne, add to it the duties and freight and the price works out to $525 a tonne, which is above the reference price.

Similarly, for cold rolled coils, the reference price for anti-dumping duty is $504 but international prices are at $525 a tonne and inclusive of duties it would be $619 a tonne.

For plates, however, it might still be viable to import because the reference price is $557 a tonne and the current international price is $388 a tonne but with duties it would be $465 a tonne.

However, producers pointed out that there is excess supply of plates in the country. The installed capacity is 8 million tonnes, whereas the actual demand is 4 million tonnes.

The ruling price for hot rolled plates, sheets and coils in domestic market is Rs 39,500, Rs 40,000 and Rs 39,500 a tonne.