Posted on 22 Apr 2016
Steel companies ask for anti-dumping duty on cold rolled steel; Investigation initiated
Three major steel companies have sought anti-dumping duties (ADDs) on cold rolled steel products.
Alongside, Vedanta and Hindalco have sought imposition of safeguard
duty on import of unwrought aluminium. Investigations have begun on
both.
On an application filed by JSW Steel, Steel Authority of India and
Essar Steel, the Directorate General of Anti-Dumping & Allied Duties
(DGAD) has initiated the investigation, said a person privy to the
development. The investigation has started even after safeguard duty and
minimum import prices (MIPs) on various steel products have been levied
by the government.
“We have initiated investigation on CR steel products from China, Japan, Korea and Ukraine,” a government official confirmed.
In the case of aluminium, the Directorate General of Safeguards (DGS)
has initiated a probe into increased import of unwrought aluminium
allegedly injuring the domestic industry. The period of investigation is
2011-12 till 2015-16. The application, filed by Vedanta, Bharat
Aluminium Company (Balco) and Hindalco, has sought “immediate imposition
of a safeguard duty on the imports of unwrought aluminium for four
years”, both for alloyed and non-alloyed wrought aluminium products.
As reported earlier by this newspaper, DGAD is also investigating
another complaint by five major steel companies on products of one
category, hot rolled (HR) flat products of non-alloy and other alloy
steel, in coils of a width of 600 mm or more. Apart from the three
previously mentioned, these five major companies include Jindal Steel
& Power and Tata Steel.
In September, the government had imposed a 20 per cent safeguard duty
for six months on various products of the HR category. Last month, it
extended the duty for two and a half years, saying increased imports
threatened serious injury to domestic producers.
In February, the government had also imposed an MIP for six months on
173 steel products, to protect domestic companies from cheaper import.
And, the steel ministry is working with the finance ministry on a
financial package for the sector.
“Both the anti-dumping applications, for the HR and CR steel products,
were sent within a small time interval,” said the source.
DGAD is also investigating a complaint by Jindal Stainless for
imposition of countervailing duty on various stainless steel products.
The steel ministry said imports were down 25 per cent over a year before
in the first 11 months of 2015-16. In 2014-15, imports were 9.3 million
tonnes; in 2015-16, these would be seven mt.
In the latest available data, China has had 166 anti-dumping
investigations intitiated against it, with duty imposed on 134 of those.
There are 11 new cases currently being investigated in the case of
China, of a total of 32.
While the department of commerce recommends an ADD, it is the finance
ministry which levies it. The petitioners should account for at least 25
per cent of total domestic production to appeal for an investigation.
The probe normally takes a year and may be extended by six months.
Preliminary findings are normally to be made within 60-70 days and a
provisional duty may be imposed, for six months and extendable till nine
months in certain circumstances.
The domestic aluminium industry has asked for an increase in import
duty to 10 per cent from the current 7.5 per cent. It was five per cent
till revised in this year’s Union Budget. The import of aluminium rose
78 per cent between 2011-12 and 2015-16, touching 432,000 tonnes.
Domestic production rose 43 per cent in the period, to reach 1.5 mt.
The applicants have said, “The profitability of the domestic industry
has deteriorated in the recent year (2015-16) and the domestic industry
is now suffering financial losses.” The application, reviewed by Business Standard, also said the market share of imports had increased to 15 per cent from 11 per cent over four years.
The DGS notice for investigation said, “After examining the application
on different economic parameters, it is seen that prima facie, despite
improvement in productivity, increased imports of PUC (alloyed and not
alloyed unwrought aluminium) in absolute terms have caused losses to the
domestic industry and are threatening to cause serious injury to
domestic producers of PUC.”
Safeguard duty is allowed under World Trade Organisation rules as a
temporary measure. The purpose of ADD is to rectify a trade-distortive
effect when goods are exported by one country to another at a price
lower than its normal value.
In June last year, India imposed ADD of up to $316 a tonne on import of
certain steel products from three countries, including China.
