Steel industry to do well as govt slaps anti-dumping duty

The Dollar Business Bureau

Indian steel industry is likely to do better due to the protection measures being taken by the government, global credit rating agency Moody's said in its report on Asian steel industry "Steel-Asia: Lower Earnings Keep Outlook Negative" which was released on Wednesday.

Profitability of steel companies of the country will be well improved when compared to the other countries in Asian region because of anti-dumping duty, minimum import price and growing demand within the country, Moody's Vice-President and Senior Analyst Jiming Zou said.

Union government has imposed anti-dumping duty on cold-rolled flat steel items being imported from four countries - China, Japan, South Korea and Ukraine for six months to safeguard Indian steel industry from low-cost imports. Earlier, anti-dumping duty was imposed on hot-rolled flat steel items imported from China, Japan, Korea, Russia, Brazil and Indonesia.

The anti-dumping duty is the difference between landed value and the prescribed value at $474 per tonne and $557 per tonne respectively on cold-rolled flat alloy or non-alloy steel products shipped from the four nations, as per the recommendations of Directorate General of Anti-Dumping (DGAD).

According to Moody's Investors Service, these protectionist measures being taken by India will impact other steel producers in Asia including China. Few loss-making Chinese steel companies have suspended their production, but the decline in supply would have less impact in the next one-and-a-half year.

Moody's expects steel demand in Asia will further decrease by a single-digit percentage in the coming one-year. This is mainly due to poor demand from the manufacturing and real estate sectors in China.

Steelmakers of Korea will get impacted owing to the restrictions on exports, and steel manufacturing firms in Japan will also suffer on account of the strong yen. Only Indian steel companies will be benefited because of the increasing domestic demand, Jiming Zou said.