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US exemptions partially benefit Indian steel

BS Corporate Bureau

Indian steel-makers may not have a lot to cheer, despite the recent exemptions by the United States government on the additional 35 per cent duty on steel import.

While the benefit goes to the galvanised sector, to a small extent at that, exporters of hot-rolled coils and cold-rolled coils, the majority of exports to the US, will not benefit much.

The US order exempts the Indian steel only from the additional 35 per cent duty. The anti-dumping duty of 36 per cent to 42 per cent, imposed earlier, holds good for the Indian companies.

The impact of the withdrawal of the additional duty will be negligible because the imposition of the anti-dumping duty has effectively curtailed exports from India to the US.

There is also a 3 per cent cap on imports by the US from one country. This will prevent any substantial surge in exports from India.

India exports around 2.8 million tonne, with a large share going to the US. The latter imports close to 27 million tonne. Tata Steel was India's largest exporter to the US last year, with exports of around 900,000 tonne annually.

However, Indian companies are trying to make good the loss of the US market by targeting other developing countries of South-east Asia.

But according to industry sources, the 4 per cent reduction in the Duty Entitlement Passbook Scheme to 14 per cent will wipe out the expected benefits for the steel majors.

However, industry sources said galvanised steel producers including Jisco, Ispat Industries and Tata Steel may gain to some extent, considering the surge in demand.

According to analysts, exports are less remunerative than domestic sales because domestic prices are currently higher than international prices. Steel-makers emphasise exports only to prevent a demand-supply mismatch in the domestic market.

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