Steel imports: China and India lead the dumping race

 The Dollar Business Bureau Excess capacity, decrease in demand and production of low quality iron ore have resulted in China and India ending up in a race like situation vis-à-vis dumping of steel. While the global steel industry is undergoing tough times, the domestic steel sector is not far behind with domestic steel manufacturers resenting against Chinese imports. Latest reports indicate that close to 3.0 million tonnes of steel was imported from China in the last 10 months in comparison to 8.1 MT of total imports of the metal. Recently, there were reports that the Government of India is mulling to cut the export duties on low-grade iron ore produced by Goa and boost the shipments to China. Earlier, the Union Minister of Mines and Steel Narendra Singh Tomar was quoted to have said that the Mines Ministry has asked the Finance Ministry to consider a separate export duty structure only for Goa owing to the lesser domestic demand for the State’s low-quality ore. The sources say that most of the Indian steel companies lack technology to use Goa’s iron ore, which has iron content less than 58% and this prompted the Mines Ministry to pitch for separate exports duty structure for Goa. In the past, when contacted by The Dollar Business, Sridhar, Executive Director, Goa Mineral Ore Exporters Association, said, “A separate duty structure is very much essential for Goa, as the State’s low-grade ores are nowhere used domestically and the exports only can benefit the sector in the State.” Because of high export duties, an estimate of around 12 million tonnes of low quality iron ore remained halted at various Indian ports, with buyers unwilling to pay high duties. Goa alone has 8 million tonnes of low quality ore waiting at the ports due to lack of buyers, say the sources. The present 30% export duty on iron ore is putting the ore exports at risk with none of the buyers coming forward, citing to this export duties as very high. These high duties have also negatively impacted the global prices on a larger scale, where the global prices have almost halved in the past year.  

This article was published on February 25, 2015.