Steely Resolve

Calcutta, May 20: The Indian Steel Alliance (ISA) has demanded an increase in duty to safeguard against cheap import of steel.

In a recent meeting, the ISA, with Steel Authority of India Ltd, Essar Steel, Jindal Vijaynagar Steel Ltd, Ispat and Rastriya Ispat Nigam Limited as its members, has sought the Centre’s intervention to jack up the import duty to at least 15 per cent from 5 per cent at present.

Domestic ruling prices of hot-rolled coils (HRC) is about $550 a tonne compared with an average landed cost of imported steel at $470 a tonne.

There has been a 33 per cent increase in imports of steel products, which was over 2 million tonnes in 2004-05, in the last one year and a 100 per cent jump in the last two years.

The situation has worsened since March with the glut of stockpile in the European and US markets. Imports of HRC have almost doubled from then, averaging around 1.2 lakh tonnes a month in April.

Industry sources said some companies were considering filing an anti-dumping case through the ministry of commerce to protect their interests.

But since it will be a more time consuming move, they are pressing for a duty hike now.

More than 50 per cent of the cheap imports of HRC are originating from CIS, Russia, Ukraine and Romania. They are reaching India through the Mumbai port.

The average landed prices from CIS is even lower than the ruling prices in the US and Europe, which is $540 a tonne and $500 a tonne, respectively.

“Since there is a huge stockpile in Europe, the commodity is being dumped in India,” industry sources said.

Some of the global steel majors like Arcelor, ThyssenKrupp, Salzgitter and Mittal Steel have also resorted to production cut in different markets.

The government had slashed import duty from 30 per cent (including additional duties and surcharges) to a mere 5 per cent in last 15 months to safeguard the domestic users.

The move was aimed at checking the spiralling domestic prices by making import a viable option for the consumers.

Many saw it as a short-term measure since global steel prices peaked last year. Duty tumbled from 30 per cent in a series of duty cuts over a span of seven months since January 2004.

At present, steel tariffs in India are one of the lowest among the developing nations and even below the WTO prescribed minimum of 8 per cent.

To add to the woes of the steel majors, the importers are taking advantage of passing seconds and defective materials under the garb of prime, with seconds and defectives calling for a higher duty of 20 per cent.

In most developed steel producing nations, imports of defectives and seconds are totally banned.