Steel producers facing pricing pressure are alleging that importers are circumventing import licensing requirements for hot-rolled (HR) products, which are included in the restricted list according to a Directorate General of Foreign Trade (DGFT) notification in November 2008.
According to the producers, in the past couple of months, large volumes of non-alloy HR coils were being imported without licences as producers were adding small quantities of boron and reclassifying the pruduct as alloy steel.
Addition of boron to steel ensures higher strength after hardening by heat treatment, but offers a workable material to fabricator or manufacturer. The quantum of boron used is very small, steel industry representatives say.
According to industry sources, companies have been hit hard anyway with cheap imports and this has compounded problems.
Traders are doing this because they cannot get a licence, only actual users can, they say.
Imports of HR coils, sheets and plates during April-September 2009 increased 39 per cent to 2.01 million tonnes, compared with 1.45 million tonnes in the same period of the previous year.
Assocham has taken up the matter with the DGFT.
“The circumvention of import licensing requirements will result in increased imports at lower prices and adversely affect the domestic industry. Secondly, imports will now be effected by traders, who will further damage the domestic market by getting into speculative and low-quality imports,” said an Assocham letter to the DGFT.
Industry sources say: “Non-traditional markets like France exported HRC to India during April-August at an average landing price of $456 (over Rs 21,200 crore) a tonne, while prices in West Asia and Far East were lower at $405-$420 (Rs 19,000-19,600) a tonne.”
At present, HRC prices are on a par with international prices at Rs 28,000 a tonne. However, some imports are still happening at lower prices.
Source : Business Standard