Indian government sets a definitive anti dumping duty on Chinese wire rod (HS code 7213 & 7227) for a period of five years based on application filed by Indian manufacturers (RINL, SAIL, JSW and Usha Martin) in the year 2016, against which investigation started in June 2016. Based on the investigation government had imposed a provisional anti dumping duty on 2nd Nov 2016 for a period of 6 months (expired on 2nd May, 2017).
It the recent notification issued by Indian government, anti dumping duty has been made permanent for a period of five years. We feel that this notification will not have an immediate impact on the market as Chinese prices are trading at higher levels.
Link attached for Govt Notification
How does it work?
1. Anti Dumping (AD) duty is for a period of 5 years.
2. AD is imposed on wire rods imported from China carrying a HS code 7213 and 7227.
3. AD varies from USD 535 to USD 546/MT per tonne. This is calculated on the basis of landed cost (CIF + Basic Custom Duty) minus anti dumping (USD 535 to USD 546).
4. For instance, an Indian importer buys Chinese wire rod at USD 570 CIF India, landed cost will be calculated as CIF value plus Basic Custom Duty (BCD). Landed cost in this case will be USD 570 + 10% BCD, which is equal to USD 627/MT. Since landed cost is higher than prices set for anti dumping , no anti dumping duty will be charged.
5. In case Indian importer buys Chinese wire rod at USD 450/MT CIF India, landed cost will be USD 506/MT (CIF value + 10% BCD). Importer is liable to pay an anti dumping duty of USD 29 to USD 40 per tonne. (USD 535 to USD 546 minus USD 506).
Impact of anti dumping duty on Indian wire rod market
1. No immediate impact on prices as imports has already been down after the provisional duty imposed in Sept 2016.
2. According to customs data, imports have dropped to about 11,000 MT per month in 2017, which used to be 30,000 MT per month in 2016 (please refer table below).
3. Significant drop of imports from China in 2017 after government’s provisional anti dumping duty
4. Chinese wire rod prices are trading at levels of USD 560-570/MT CIF and at these levels anti dumping duty will not make much of a difference
5. Anti dumping duty will only be relevant for Indian market if Chinese prices fall below USD 480/MT CIF India
6. At current price levels (USD 570 CIF + basic custom duty of 10%), landed cost of imports is much higher than the value ( USD 535-546) set for anti dumping. This means if someone imports wire rod from China, anti dumping duty will not be applicable at these price levels
India produces about 5 to 5.5 million tonnes of wire rod annually and exports about 0.15-0.20 MnT
Wire rod Imports in India
| Exporting Country | HS Code 7213 | |
| 2017 (Till Jul) | 2016 | |
| South Korea | 14,589 | 17,741 |
| Germany | 5,093 | 4,557 |
| Japan | 4,915 | 3,546 |
| China | 3,276 | 3,982 |
| UAE | 1,580 | 1,569 |
| Others | 4,751 | 8,145 |
| Total | 34,204 | 39,540 |
| Exporting Country | HS Code 7227 | |
| 2017 (Till Jul) | 2016 | |
| China | 48,342 | 3,12,566 |
| Japan | 14,071 | 14,459 |
| UAE | 4,145 | 10,104 |
| SouthKorea | 3,321 | 9,604 |
| Singapore | – | 12,100 |
| Others | 6,428 | 12,183 |
| Total | 76,307 | 3,71,016 |
Quantity in MT
Source: Indian Customs, SteelMint Stats
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