The extension of the anti-dumping duty (ADD) on hot-rolled (HRC) and cold-rolled coil (CRC) would remain a near-term positive for the domestic steel producers, rating agency ICRA said in a recent report.
Earlier this week, the government extended the validity of the provisional ADD for two more months till April 7 for HR products and April 16 for cold-rolled producers as investigations are still pending.
“With around 80% of India’s steel imports taking place in the flat product category, this extension of ADD remains a near term positive for domestic flat product players,” Jayanta Roy, Senior Vice President and Group-Head-Corporate Sector Ratings, ICRA Limited, said.
However, he added that given the 35% rise in Chinese export offers of HRC and CRC between April and February of FY’17, the current landed price of imports is higher than the notified level stipulated for imposition of ADD. The threshold landed price for HRC is USD 474/MT and USD 594/MT for CRC.
“Therefore, at current international prices, the provisional anti-dumping duty does not kick-in. Nonetheless, given the large volatility witnessed in international steel prices in the last two years, the extension of ADD would provide a floor to domestic flat steel prices against any shocks in international prices in the immediate term”, Roy added.
The imposition of ADD, along with safeguard duty (SGD) and minimum import price (MIP) have resulted in a 37% year-on-year (Y-o-Y) decline in India’s steel imports during April-December period of the current fiscal, after rising steeply by 26% Y-o-Y in FY’16 and 71% Y-o-Y in FY’15.
The decline in imports has coincided with a strong growth in steel exports by domestic mills, supported by an improvement in the pricing scenario in international markets. This has helped bridge the gap between India’s steel imports and exports to just 0.52 MT during April-December period of the current fiscal as against a much wider 7.64 MT during FY’ 16, the report said.
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