In a slew of tariff changes, the Indian government has scrapped export duties on pig iron, specified iron and steel products and pellets, according to a government notification late on Friday, November 18.
As a result, 15 percent export duties from India on major longs and flat steel products, as well as pig iron, have been lowered to zero, while the export duty of 45 percent on pellets has also been scrapped. The export duty on iron ore lumps and fines with less than 58 per cent Fe content has been reduced to zero, while that on iron ore with Fe content more than 58 percent has been reduced to 30 percent from 50 percent earlier.
High export duties were imposed six months ago to help redirected some needed volumes to the local Indian market, and this led to a significant reduction in exports and the lower competitiveness of Indian mills, at a time when more Asian suppliers wanted to increase their export market share.
In other changes to Indian tariffs, an import duty of 2.5 percent has been imposed on anthracite, PCI, coking coal and ferronickel used by the steel industry and five percent duty on imported coke and semi-coke, from zero earlier.
Welcoming the changes in the export duties, ArcelorMittal Nippon Steel Limited CEO Dilip Oommen said, “This will re-energize and further motivate the industry to move forward with full confidence and put the industry on a path of inclusive growth.”
JSW Steel Limited joint managing director Seshagiri Rao said, “It will be a big sentiment booster to revive domestic steel demand, particularly when global steel demand is on a steep decline.”
Most local sources agree that the lifting of export duties in India is a positive move and it was awaited by the industry, but most sources believe that the major support is from the sentiment side, rather than a real immediate possibility of exports increasing. Local prices for rebar have already reacted to the news with some increases, SteelOrbis has learned. “Secondary mills have been cutting local prices constantly lately, but they have also reduced production in last 10-15 days. So, the current hike [in local prices] is more reaction on sentiments and some resumed restocking after Diwali,” a local source said. In the export market, where competition between Asian suppliers is tough, especially in the HRC segment, Indian producers are unlikely to boost sales immediately. However, the prospects are better now and India may be more active in its traditional export markets like Europe, for instance.
