Govt sets minimum import price on steel products to curb dumping

The commerce ministry on Friday fixed a minimum import price (MIP) for certain steel products to protect domestic manufacturers from cheap imports. The MIP will be valid for the next six months and may be extended, if needed.MIP on ingots and billets has been fixed at USD 362 per tonne, for flat rolled and hot rolled steel at USD 445-500 per tonne and semi-finished steel at USD 341-362 per tonne.GD Mundra, Sarda Energy & Minerals, says the company deals with Ingots and Billets and flat products and the MIP is reasonable. He also says there are a number of companies in the steel sector whose EBITDA are not sufficient to recover interest. "They are able to only recover 50-40 percent of their interest. There this measure was needed very badly," he told CNBC-TV18.He also says: "This is a welcome proposition because we have been lobbying and waiting for such a move for a while now and this will give some stability to prices. It will certainly help the industry reeling under the continuous falling price of the commodity, due to dumping from China and other countries."Earlier, steel secretary Aruna Sundarajan had told CNBC-TV18 that domestic companies are passing through a critical phase due to the increased imports and it is imperative to provide them a level-playing field.
Industry sources suggest the commerce ministry plans to review the minimum import price bi-monthly and that the impact of fixing such a price would be visible only over 6 months.

China, Japan and Korea have been exporting cheap steel products in bulk.Steel Minister Narendra Singh Tomar says the domestic industry was facing lot of trouble due to dumping. This industry generates a lot of jobs and is important to the economy of the country, he says, and hence safeguarding or protecting the industry was necessary. RK Goyal, MD, Kalyani Steel, too, welcomes the move and says: "This will definitely help the industry and save a lot of jobs... The industry can be divided into large and medium sized industry. Both are incurring huge debt and not in a position to even pay the interest." Kalyani Steel too has a fair amount debt, but it is not under too much stress as the company had stopped expanding since the past several years.Ravi Uppal, the managing director and CEO of Jindal Steel (JSPL) believes such a move was imperative for the survival of the steel industry.

Even earlier, the government had imposed safeguard duties, albeit a provisional one and on just one item. Uppal says: "That obviously was not adequate. It should have been done across the entire value chain."