BUSINESS
In a move to arrest the low-grade steel production in the country, the government has withdrawn the 9% export rebate given on products such as hot and cold rolled coils in the flat segment.
China has removed its export rebate on certain steel products, which effectively discourages exports from the country.
In a move to arrest the low-grade steel production in the country, the government has withdrawn the 9% export rebate given on products such as hot and cold rolled coils in the flat segment, and long steel, which primarily used in the construction sector.
The rebate stands withdrawn with effect from July 15.
Industry experts and analysts believe this is a positive for Indian steelmakers as the price difference between local and imported steel is currently as much as $100 per tonne (approx Rs 4,620).
Imports from China could slow down and prices could stabilise.
Prasad Baji, Faisal Memon and Manan Tolat of Edelweiss Capital, in a report on June 22, said: “Currently, China exports hot rolled coils at $600 per tonne. Withdrawal of the 9% export rebate would mean $54 per tonne lesser profit for Chinese steel exporters, effectively leaving a very thin or possibly no margin.
This would mean reduced level of Chinese steel exports in the second half of the calendar year 2010.”
The analysts said the news is positive for steelmakers such as Tata Steel and JSW Steel.
However, they believe the news is a negative for iron ore miners like Sesa Goa, as most of Sesa Goa’s ore is exported to China.
“The hidden agenda for this move is that this would lead to strong production cuts in China, reducing raw material prices. Ultimately, the strong pricing power of miners will reduce,” the analysts said.
An official from a domestic steel company, on condition of anonymity, told DNA Money, “There has been a huge surge of steel coming from China in the past two months at an average price of $550 per tonne. This has really impacted our sales and prices are under tremendous pressure. Given the high raw material costs, we cannot afford to sell our steel at such low prices.”
Pinakin Parekh and Neha Manpuria of JP Morgan India, in a report dated June 22, said: “While the removal of export rebates is unlikely to result in a complete reduction of exports, we believe the removal of rebates is likely to reduce the import pressure into India from China.”
However, they believe near-term pressure on Indian steel prices will continue and the companies may have to lower prices, as the gap between domestic and imported steel is close to Rs 5,000 per tonne.
Parekh and Manpuria said, “In terms of stock picks, we would continue to highlight Tata Steel for the aggressive investors and SAIL for more defensive investors.”
Meet Usha Chilukuri, who is set to become first Indian-origin second lady of US, she is wife of...
Delhi NCR: Traffic advisory issued in Ghaziabad ahead of Chhath Puja 2024, check routes to avoid
ICC Test Rankings: Rishabh Pant breaks into top 10; Virat Kohli, Rohit Sharma suffer massive loss
NASA's Sunita Williams witnesses 16 sunrises, sunsets daily in space, here’s how
'India will…': Ricky Ponting makes BOLD prediction for Border-Gavaskar Trophy
From DU to Tesla: Meet man who works for Elon Musk, manages his company's...
Essence of Leadership: Insights from Ankur Saini
Who is Thomas Draca? First Italian player to register for IPL 2025 mega auction
IPL 2025 mega auction: Full list of players with Rs 2 crore base price
Meet man who quit Paytm after Rs 2048 crore deal with Deepinder Goyal's Zomato, he is...
Anushka Sharma can't stop laughing seeing Virat Kohli's funny move in unseen viral video - Watch
SA vs IND: Arshdeep Singh aims to surpass Bhuvneshwar Kumar’s all-time T20I record
Donald Trump reclaims US presidency, netizens win hearts with meme-fest
'Everyone will come to know...': LoP Rahul Gandhi's BIG statement on caste census in Nagpur
Thama: Ayushmann Khurrana reveals all about 'bloody love story', says it is....
'History’s greatest comeback': Israel PM Netanyahu congratulates Donald Trump on US Election victory
US Election Results LIVE: Donald Trump's victory speech; WATCH HERE
Arjun Kapoor hits back at haters post Singham Again success: 'To everyone who...'
'Let's work for global peace': PM Modi congratulates 'friend' Donald Trump on winning US election
Swiggy's next BIG step, set to challenge Mukesh Ambani ahead of IPO, collects Rs...
Amid divorce rumours, Abhishek Bachchan and Aishwarya Rai set to reunite for...
J-K Assembly passes resolution seeking restoration of special status of erstwhile state
CAT Admit Card 2024 RELEASED: Step-by-step guide to download from iimcat.ac.in
Kiki Hakansson, the first ever Miss World, passes away at 95
This company surpasses Apple as world's biggest company, it's market cap is Rs...
IPL 2025: Mitchell Starc breaks his silence on not being retained by KKR, says, 'I still have not…'
J-K: Encounter breaks out between security forces, terrorists in Kupwara
‘Our relationship with US…’: EAM S Jaishankar on US Presidential Election 2024 Results
Delhi-NCR AQI: No relief from pollution, Delhi air quality remains 'very poor'
Dev Diwali 2024: Dates, significance, how to celebrate, everything you need to know
Israel PM Netanyahu fires Defence Minister Yoav Gallant over 'lack of trust'
Swiggy IPO opens today, aims to garner Rs 11327 crore: Check price band, lot size and more
Raftaar breaks silence on his feud with Honey Singh: 'Aapas mein toh kuch bhi ho sakta hai but...'
DNA TV Show: How US Presidential election results may impact the world
Sharda Sinha dies at 72: Who are there in her family?
Who was Sharda Sinha aka Bihar Kokila, famous for Chhath and Maine Pyar Kiya songs?
Mortal remains of Sharda Sinha being taken to Patna for last rites
Parliament's winter session to begin from Nov 25, to continue till Dec 20
IPL 2025 mega auction dates announced: Check no. of players, venue, where to watch and more
Amid divorce rumours with Abhishek Bachchan, Aishwarya Rai’s ‘1 million dollars’ comment goes viral
Deepinder Goyal reveals customers' reaction to wife Grecia Munoz delivering Zomato orders
Infosys founder Narayana Murthy flirts with Sudha Murty in viral video from Kapil Sharma show
Ajay Devgn's fans don't want Singham Again to become a blockbuster: 'Rohit Shetty jab tak hai...'
Types, Most Popular and Where to Buy Peptides for Bodybuilding
Luxury in the City of Light: SABO Boutique Hotel Brings Elegance to Varanasi’s Sacred Ghats
Virat Kohli, Babar Azam could play for same team as Afro-Asia Cup set for revival
Shaping the Future of Web Apps: Full Stack Developer’s Expertise in API Design and Cloud Deployment