In a recent update in safeguard duty case on HRC, SteelMint has learnt from a DG Safeguards official that the final decision on the case is likely to be announced by next week.
In order to protect cheap steel imports in to India especially from China, Japan and Korea, on 14 Sep’15, DG Safeguards (DGS) imposed 20% provisional safeguard duty on ‘Hot Rolled Flat products of non-alloy and other alloy Steel in coils of width of 600mm or more’, for 200 days.
However, safeguard duty didn’t prove to be effective in restricting cheap HRC imports in to India. On 5 Feb’16, the government came out with another trade barrier in the form of Minimum Import Price (MIP). MIP was levied on 173 steel products including HRC.
As per SteelMInt analysis, currently the landed cost of import for HRC at MIP rate (USD 445/MT) from Japan/Korea is about INR 42,000/MT. However, if 20% safeguard duty is phased out, the landed cost of import will come down at INR 36,500-37,000/MT.
Also post MIP, domestic flat products prices have surged by INR 4,000-5,000/MT in the traders market and are hovering in the range of INR 33,500-35,000/MT. Now if the safeguard duty is rolled back there won’t be major difference left between the landed cost of imports and domestic prices and possibly imports will start coming in to India at previous pace once again.
However, market participants believe that two barriers (MIP and safeguard duty) cannot co-exist and thus there are chances that safeguard duty will be phased out in the upcoming week.
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