The Centre is weighing the possibility of extending the safeguard duty on hot-rolled coil to an array of steel products following a representation from domestic manufacturers reeling under a surge in imports from China, Japan and South Korea.
The steel industry has lobbied with the government to impose a duty on cold-rolled items, galvanised products, wire rods and TOR steel.
Sajjan Jindal, chairman and managing director of $11-billion JSW Group, said there was a need to look beyond hot-rolled coil to save the domestic industry.
"The Centre has been very proactive to impose a 20 per cent safeguard duty for 200 days. But there are other products that also need protection," Jindal said.
Syedain Abbasi, joint secretary in the steel ministry, said, "Well, they have to make a representation which they have done. We are examining the proposal. If there is merit, action will be taken accordingly."
In March, the directorate general of safeguards had rejected a demand for the imposition of a levy on cold rolled stainless steel products.
India imports 1 million tonne (mt) steel per month compared with its production of 7mt. Last year, the country imported less than half a million tonne a month.
Jindal said more than the volume, it was import price that was hurting the industry. "Japan and South Korea are selling at a price less than their domestic market. China is also steadily reducing prices," he said.
Industry sources said Japan and South Korea were selling at $500 a tonne in their home markets but exporting at $350 a tonne even after paying sea freight. They also don't need to pay import duties because of free trade agreements with India.
China shock
Moreover, Chinese producers are undercutting imports from these two countries. After the safeguard duty on hot-rolled coil was imposed (over and above import duty), Chinese manufacturers slashed export prices 10 per cent to $300 a tonne.
According to one source, they are threatening to reduce the price by another 10 per cent.
Jindal said China started exporting in a big way after facing slowdown in internal demand.
"It may export 110-120mt of steel this year. Japan and South Korea are also exporting. So there is lot of export coming to world market from this region," he added.
JSW Steel, the third-largest maker of the alloy in India after SAIL and Tata Steel, will produce 18mt by the end of this year.
Abbasi pointed out that 5-6 per cent of imported steel would be healthy for the economy as it would keep the prices in check but the situation might aggravate if it increased further.
Global steel capacity stood at 2,351mt last year with China accounting for half of that. Global output stood at 1,665mt, surpassing consumption at 1,537 mt. Chinese surplus capacity alone may reach 642mt this year.
Abbasi said despite the stress in the sector, the country's total steel production is likely to rise to 300mt by 2025. However, the industry is doubtful, given the meltdown in commodity price and demand following the slowdown in China.
India's steel consumption grew 3.1 per cent to 76.36mt last year and is expected to increase 6-7 per cent this year.
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