Strong rumors of safeguard duty in the month of August has resulted in HR/CR import restrictions in the month ahead.
Steel (HR/CR) imports, which have been a major problem faced by beleaguered Indian steel industry, fell by 13.46% in Sept’15, according to provisional customs data maintained by SteelMint.
Indian HR (HS code-7208) imports registered a fall of about 14% from 0.42 MnT in Aug’15 to 0.37 MnT in Sep’15. While, CR (HS code-7209) imports fell by 20% from 0.10 MnT in Aug’15 to 0.08 MnT in Sep’15.
Biggest volume of HR/CR imports in September were made from Korea with 0.22 MnT (up 1.93% from Aug’15), Japan with 0.13 MnT (down 25.46%) and China with 0.04 MnT (up 172.10%).
In order to deal with cheap imports, Indian government increased import duty on steel twice from 7.5% to 12.5% in last six months.
However, duty hike didn’t help in restricting imports from Japan and Korea as India had signed FTA (Free Trade Agreement) with both the countries. Owing to FTA, 1.25% and 0.8% of duty is charged on imports from Japan and Korea respectively.
Post surge in import duty, Indian steel players demanded imposition of safeguard duty on hot rolled products.
In Aug’15, rumors of safeguard duty became dominant in the market. As a result, domestic buyers limited their imports. Its effect was observed in September with a fall in HR/CR total imports.
On 15 Sep’15, Indian government announced 20% provisional safeguard duty on hot rolled products, which is anticipated to restrict imports further in October.
Though with fall in September imports picture looks encouraging, Indian steel industry still remains under pressure of cheap imports. This is majorly because of sluggish overseas demand coupled with foreign producers’ steel overcapacity.
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