Rising steel prices hit export sectors
Rising steel prices have hit the exports of valueadded products and made them less competitive in the international market. Along with increasing iron ore exports, curbs on import of steel from China, Vietnam and South Korea are also pushing up domestic steel prices.
“In the backdrop of restrictions on imports from China, Vietnam and South Korea, Indian steel makers have raised the prices across different product categories, making the raw material cost for user industries skyhigh and leaving the engineering exporters noncompetitive in the international market,” says Engineering Export Promotion Council of India.
The export of valueadded products, including automobile components, industrial machinery has been down in the past few months. Higher steel prices will further affect the competitiveness of Indian valueadded products, it said.
Pig iron and steel prices had gone up by Rs 3,000 per tonne in the local market in July. Further, hot rolled coil prices have moved up by Rs 700-750 per tonne on an average, cold-rolled coil prices by Rs 500-550 per tonne, steel pellets by Rs 300-350 per tonne and iron ore fines and lumps by Rs 200-250 per tonne.
“Iron ore exports have been increasingly happening of late. Though they started exporting when the demand was low in the domestic market, it is being continued even when demand is picking up. The lower import of steel from the international market is also making the steel producers hike the prices,” said Mahesh Desai, chairman, EEPC India.
According to him, international prices of some of the categories used by Indian steel product manufacturers are lesser than the domestic prices.
But, the government had imposed anti-dumping duty on imports of certain types of steel products from China, Vietnam and South Korea for five years. Duties ranging from $13.07 per tonne to $173.1 per tonne have been levied on imports of flat rolled product of steel, plated or coated with alloy of aluminium and zinc from these three countries.
MSMEs are not in a situation to use advance authorization scheme to import steel at higher duties.
''In such a scenario, the dependence of India’s engineering industry on the domestic steel market is only expected to increase in the coming months,” said Desai.