The Indian Steel Association (ISA) has urged the government to extend the Minimum Import Price (MIP) on certain steel products by six months to offset the expected dent in demand and production due to factors like demonetisation and anti-dumping duty on metallurgical coke. “We have urged the government for continuation of the MIP regime for six months, pertaining to imports for 66 HS codes of iron and steel,” ISA said in a statement here.
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The complete material impact of MIP — imposed for the first time on 173 HS codes in February 2016 — has not yet trickled down to boost domestic demand for the said products, it added. Recent developments, including liquidity crunch among consumers on account of currency demonetisation as well as imposition of anti-dumping duties on import of metallurgical coke into India are expected to further dent the demand and production situation respectively, ISA Secretary General Sanak Mishra said.
While domestic prices of hot rolled coils (HRC) did begin to recover from February 2016 onwards, they witnessed a drop from June 2016 to August 2016 on account of sluggish construction activity during the monsoon. After subsequent extensions on a limited set of 66 HS codes in August 2016 and October 2016, the prices rose marginally, primarily on the back of a more than three-fold jump in international spot prices of coking coal from around USD 90 per tonne in July 2016 to around USD 300 per tonne in December 2016, while the demand for steel continued to remain weak.
The same can be substantiated from the fact that India’s consumption of total finished steel grew by a meagre 2.8 per cent during April-October 2016-17 over the same period last year, as per figures published by Joint Plant Committee of the Union Steel Ministry. Additionally, the rightful imposition of anti-dumping and safeguard duties by the government on various steel products over the past few months have come through after comprehensive investigations and stakeholder discussions by the designated authorities and their assessment of the injury caused to the domestic industry.
The same should not be construed as sops being doled out to the industry, majority of which continue to be financially distressed, ISA said. These measures, being either product specific or country specific, also cannot be considered as adequate replacement to MIP for offering a level playing field, it added.
Indian Steel Association is the premier body of Indian steelmakers which represents 60 per cent of steel capacities in the country.