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Business Economy 21 Aug 2020 Here's how Indi ...

Here's how India's engineering exports are in a steel trap

DECCAN CHRONICLE. | SANGEETHA G
Published Aug 21, 2020, 12:19 am IST
Updated Aug 21, 2020, 7:38 pm IST
We export our iron ore, curb Chinese steel import. So costs are up and exports are uncompetitive
Rising steel prices have inflated costs for equipment manufacturers. (Photo: Jindal Steel)
 Rising steel prices have inflated costs for equipment manufacturers. (Photo: Jindal Steel)

Chennai: Rising steel prices have hit export of value-added 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 boosting domestic steel prices.

“Against the backdrop of restrictions on imports from China, Vietnam and South Korea, Indian steelmakers have raised prices across product categories. This has sent raw material cost for user industries sky high. This is making engineering exporters non-competitive in the international market,” the Engineering Export Promotion Council of India has said.

 

Pig iron and steel prices went 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 increasing of late. Though they started exporting when demand was low in the domestic market, it is continuing even after demand picked up. Lower import of steel from the international market is also making steel producers hike prices,” said Mahesh Desai, chairman of EEPC India.

 

According to Desai, international prices of some of the categories used by Indian steel product manufacturers are less than 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 z 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.

The export of value-added products, including automobile components, industrial machinery has been down in the past few months. Higher steel prices will further affect the competitiveness of Indian value-added products, finds EEPC.

EEPC wants government intervention in ensuring availability of steel at the export parity price for MSME engineering exporters.

 

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