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Steel firms feel Chinese import pinch

There seems to be no stopping the Chinese from exporting steel. Not even with fiscal speed-breakers.

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Domestic firms to determine quantum as precursor to filing formal charges

KOLKATA: There seems to be no stopping the Chinese from exporting steel. Not even with fiscal speed-breakers. The dragon exported 6.36 million tonnes of steel in June, 2007, up 43.56% on a year-on-year basis and 3.08% higher than May exports. And by way of rearguard action, Indian steel companies have launched an exercise to determine the quantum of Chinese steel that has landed on domestic shores and `injury’ it may be causing to steel producers here-possibly a precursor to bringing in formal dumping charges.

The unabated rise in exports in June has even caught the Chinese government on the wrong foot since it had been banking on overseas shipments easing following levy of 5-10% export tariff and increase in duties on exports from 10% to 15%, effective June 01.  

The fiscal disincentives were imposed following threats of trade retaliation by China’s trading partners like US and EU, which claimed that rampant exports were hurting their domestic steel producers.

Definitive figures on June steel imports are not available, estimates are that in May-June, at least one million tonne of Chinese steel may have entered the Indian markets. In January-April, around 3 million tonne of steel originating from China was imported into the domestic market.

Indian integrated steel companies led by Tata Steel and Steel Authority of India Limited (SAIL) have taken up the issue of rising imports from China with the Union steel ministry. However, officials in these two companies said that due to lack of definite figures on quantities and imported price, it had been difficult to firmly establish the hurt caused to domestic industry, a pre-requisite to bringing any charge of dumping by Chinese steel companies.

 The Chinese government, under pressure to reduce trade surplus with US, had decided on new measures like reduction in export tax rebates from 13% to 3% for certain steel product categories. However, China Daily, quoting analysts said that `these policy influences would fade in two to three months and total exports of steel this year will be around 10-11% of total production.” In the first half of current calendar China exported 33.79 million tonnes of steel, up 97.9% on year-on-year basis and imported 8.69 million tonne, down 7.6% year-on-year.

Officials in SAIL said that the Union steel ministry, while appreciating the concern of domestic producers, advised that industry should make out a firm case only after collating hard facts on quantities and prices. It had been re-iterated to the industry that a case could be made out before the Designated Authority on Anti-Dumping of the commerce ministry only if it could be established that Chinese imports have been at prices below cost of production or subsidised which harmed majority of steel producers in India.

But steel companies have impressed upon the ministry that US steel cos have been successful in bringing their government to hard talk with China by claiming hurt from Chinese exports without having to bring formal dumping charges. They expect the Indian trade negotiators to do the same with their Chinese counterparts.

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