Moody's Investor Service said that the Indian domestic steel market may witness weak and volatile prices if there is no extension of the minimum import price curbs, imposed on various steel products to check below cost imports, after August 2016.
It said: “Absent an extension of the MIP beyond this date or a similar alternate protectionist measure, domestic steel prices will remain weak and volatile and will reflect the global steel oversupply amid slowing steel consumption in China.”
Moody's said: “Protectionist measures by the Indian government in the form of import duty hikes, safeguard duties or MIP will help the domestic steel industry. However, uncertainty remains as to whether the MIP will be extended beyond August 2016 or replaced with similar duties.”
Moody's said it believes that slowing demand in China, the world's biggest consumer and producer of steel products will continue to prompt Chinese steel-makers to look overseas to sell excess supplies and pressure steel prices globally.