A mix of policy preference for locally made steel, rise in global steel prices and a slew of measures undertaken by the government to rein in cheap imports led to an unprecedented 53% rise in steel exports in April-December 2017 to 7.6 million tonne (mt), with consumption rising 5.2% during the period to 64.9 mt, the Economic Survey has said. Sale of finished steel rose 5.6% to 79.3 million tonne (mt) during the period April-Dec 2017, the Survey added. This indicates a steady turnaround in the fortunes of the core infrastructure sector.
In the backdrop of a slowing world economy and surplus steel production capacity, the country was faced with rising imports of cheap steel from countries like China, South Korea and Ukraine since early 2014-15. “This dumping of cheaper steel imports adversely affected domestic producers. In order to address this, apart from raising customs duty and imposing anti-dumping duty, Minimum Import Price (MIP) was introduced in February 2016 with a sunset clause of one year. These measures helped the domestic producers and exports recovered since February 2016 until March 2017,” the Economic Survey said.
Subsequently exports started declining again. The government then notified anti-dumping duties and countervailing duties on various steel products in February 2017. This includes imposition of anti-dumping duties on import of seamless tubes, pipes and hollow profiles of iron, alloy or non-alloy steel originating and exported from China. The government also imposed anti-dumping duty on hot rolled coils (HRC), HR plates, cold rolled (CR) products, wire rods and color coated steel. The government also levied countervailing duty on imports of stainless steel cold rolled flat products of all grades/series from China, Korea, the European Union, South Africa, Taiwan, Thailand and the US.
This coincided with a significant cutback in China’s steel production capacity of steel leading to a rise in international prices of steel, since June 2017.
In May 2017 the government rolled out a New Steel Policy. To add to this, preference to locally manufactured select iron & steel products has been enforced since May 2017. These measures have helped keep a check on imports which went up by only 10.9% in April-December 2017 to 6.1 mt, the Survey said.economictimes