India Steel Market Watch
December 11: The government is soon expected to fix a minimum import price (MIP) for steel products to protect the domestic industry from cheap inbound shipments.
The ministries of commerce and steel, which are discussing the matter, have proposed a floor price for over 30 products below which imports into the country would not be allowed, sources said.
The steel ministry had asked for 35-40 products, including pig iron, semi-finished products and cold-rolled coils. But the commerce ministry has asked them to prune the list.
The move comes amidst the domestic steel industry facing a tough situation due to cheap imports from countries such China, Japan, South Korea, and Russia, among others.
The steel companies, which have taken huge loans for capacity expansion, are under severe stress as cheap imports are eating into their domestic share.
The government's move to impose an MIP comes even as it is considering a safeguard duty on certain steel imports.
SAIL, Essar Steel, JSW Steel and Jindal Steel & Power moved the Directorate General of Safeguard for imposing levy on imports of “hot-rolled flat sheets and plates of alloy or non-alloy steel” to "protect the domestic producers" from increased imports.
In September, the government had imposed a provisional safeguard duty of 20% on imports of hot-rolled flat products of non-alloy and other alloy steel, which is in vogue for 200 days.
In August, the government had hiked the import duty on base metals, including iron and steel, by 2.5%, in a move aimed at helping domestic players battle out cheap Chinese imports after the currency devaluation by China.
In June, India also slapped anti-dumping duty of up to US$316 per ton on imports of certain steel products from three countries, including China.
Share price of steel majors gained over 3% on reports that the government is likely to impose more curbs on steel imports.
According to market analysts, the duty on the minimum import price or increase in the MIP is likely in the next few weeks. In November steel imports declined 6.9% to 0.76 million tons, its first decline in almost eight months.