Floor price set for steel import

The seven products that attract a floor price for imports are hot rolled coils, cold rolled coils, tinplate, hot rolled sheets, electrical sheets, plates and alloy steel bars and rods when hot rolled in coils. The bar on dumping of inexpensive steel, comes close on the heels of a similar restriction imposed on steel seconds, defective and wastes of the same products last week.

In quick succession, the Director General of Foreign Trade DGFT first notified a floor price for second-grade material on Thursday, following it up with asimilar notification on prime steel. The cut-off price of prime products are based on the rates of Japanese and European steel, as listed in the London Metal Bulletin.

The cheap flat steels against which steel majors at home were planning an anti-dumping petition, incidentally, come mostly from Southeast Asia, particularly South Korea, the CIS countries and South Africa. Of late Japanese steel has also begun to compete with Indian products on their home terrain.

Hot rolled coils tin mill quality imports will be blocked for instance, if priced below 302 per tonne c.i.f. cost in freight. Seconds of the same product face an import bar if priced at less than 232 a tonne c.i.f. Hot rolled sheets imports will be allowed at a price of 317 a tonne or more, while defectives can be imported, if priced above 243 a tonne c.i.f.

All the seven steel products, both primes and defectives, are at present on the open general licence OGL. Cold rolled coils have a cut-off import price of 392 a tonne c.i.f,while defectives face an entry barrier if priced below 299 a tonne c.i.f.

Tinplates can be imported at a price of 720 a tonne or more, while tinplate waste can come into the country if priced higher than 545 a tonne. The floor price for importing prime grades of electrical sheets CRNO is 763 a tonne c.i.f, while defective products can be imported at 577 a tonne or more. Prime grades of steel plates face an entry barrier, if priced at less than 409 a tonne. The floor price for defective plates is 311 a tonne. Alloy steel bars and rods if hot rolled in coils face a restriction if priced at less than 740 a tonne. Scrap and seconds of the same material have to be priced at 560 a tonne or more.

Incidentally, steel imports have been on the decline this year, after increasing rapidly every year since the phased cut-back in customs duties began in 1991. The total steel imports between April and May this year, was 1.57 lakh tonne, compared to 2.67 lakh tonne in the first month of the 1997-98fiscal.

Industry sources point out that the 8220;real damage8221; to the domestic market was not in the quantity of imports, but in the prices at which steel was pouring in. Hot rolled coils comprise half the steel imports every year, followed by cold rolled coils, the prices of which have only moved downhill in the last two years.