Indonesia Levy On Hrc Imports To Hit Essar Plans

Essar Steels forward integration plans received a setback with the imposition of a 35 per cent provisional anti-dumping duty by Indonesia on hot rolled coil imports from 5 countries including India.

Essar had been exporting HRC from its integrated plant at Hazira, to its Indonesian joint venture PT Essar Dhananjaya, for conversion into cold rolled coils and galvanised plates and coils, till recently.

The imposition of provisional anti-dumping duty by Indonesia is going to affect the exports plans of steel majors Tisco, and SAIL and Essar, as all these three companies besides Lloyds have been brought under the ambit of the counter veiling duty. Indonesia imports 5 lakh tonnes of steel annually from 16 countries.

 

The Indonesian move follows steel major PT Krakatau Steels move seeking the imposition of anti-dumping duty on imports of HRC.

Essar exports HR coils to its joint venture in Indonesia for manufacture of value added products like CR coils, and GP\GC sheets. The share of exports to Indonesia by Essar Steel is 5 per cent of its total exports and this levy of provisional anti-dumping duties would not have a major impact and Essar would therefore continue to be major exporter of flat products to other markets, Essar sources said.

The legal opinions on anti-dumping indicate that Essars exports to Indonesia may not come under dumping and that the company may not be able to seek exemption from anti-dumping duty, the sources added.

In the mean time PT Dhananjaya which has a capacity of 1.5 lakh tonne will be sourcing its raw material from Indonesian, Japanese and Korean mills, and therefore will not be affected as a result, Essar sources added.

Essar Steel exports 22-25 per cent of its production to countries like the US, UK, Germany, Japan, China and the Middle East.

The Indonesian move is in line with the growing trend of anti-dumping duties being imposed by the Asean authorities against imports from various countries. Others who have recently imposed similar duties include Thailand and Philippines.

The countries affected most as a result are the Russian and CIS countries. Indonesia has imposed anti-dumping duties on Kazhakastan, Ukraine, Russia, China and India.

The mills covered include Novoliptesk and all other steel plants in Russia, all plants in China, Llych Zaporisthal Works and all other steel mills in Ukraine, all steel mills in Kazhakastan and all steel majors in India including SAIL, Tisco Essar and Lloyds.

It may be mentioned that that Indian steel manufacturers too have filed for the imposition of anti-dumping duties against the CIS and Russian mills and action on this is expected soon.