Financial Daily from THE HINDU group of publications
Thursday, Mar 07, 2002
Industry & Economy
Domestic steel cos see cascading effect
MUMBAI, March 6
THE Indian steel industry, already subjected to anti-dumping duties in the US, is not unduly perturbed by the additional tariff.
Indian hot-rolled coil manufacturers have been looking for new markets ever since anti-dumping duties were introduced and exports to the US had dried up, industry sources said.
But the lingering danger, as Mr R.C. Nandrajog, Vice-President (Finance), Tata Steel, pointed out, is that reduced export markets for global steel makers from the US action and what lay in store from potential European retaliation, could have cascading price pressure on India's emerging export markets.
Tata Steel does not export to US and Europe. Its markets include China, West Asia, South-East Asia and India's neighbourhood. "While only indirect impact seems possible, one can comment only after reading the fine-print," he said.
Most companies, when contacted, said the details of the US action were awaited.
"It is not known if India is among the list of 80 developing nations exempt from this tariff,'' said one steel industry official.
According to Mr J. Mehra, Managing Director, Essar Steel Ltd, the US action is an "outstanding example of a Government protecting a sick and inefficient industry''.
The Indian Government should ban import of all steel products into the country.
"In view of the US action, even EU market will remain shut for other steel exporters forcing steel manufacturers from other parts of the world to dump steel into India," he said in a statement.
Essar Steel's exports of hot-rolled coils to the US accounted for 40 per cent of the company's total exports.
Jindal Iron and Steel Company Ltd's (JISCO), galvanised steel exports to the US is unlikely to be hit, Mr Raman Madhok, Joint Managing Director and CEO, JISCO, said.
JISCO accounts for 90 per cent of India's galvanised steel exports to the US.
"Buyers of galvanised steel had factored in this tariff to the extent of 20-22 per cent," he said.
According to him, JISCO exports galvanised steel in coil form for the HVAC market. "This market is growing at 4-5 per cent. Therefore, the tariff burden is not likely to have a major impact," he said.
However, the company has been looking at newer markets in China, besides Europe.
Of the total steel inflow of 30-35 million tonnes into the US, Indian exports were around one million tonnes on an average.
Japan and Korea were among the leading steel exporters to the US.
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