Just as suddenly as the government had levied an export duty of 15% on most key grades of steel and 45-50% on raw materials like iron ore and iron ore pellets in May this year, it scrapped those duties effective Saturday via a circular issued late on Friday night.
Prices of the benchmark hot-rolled coil (HRC) steel went up by Rs 500 per tonne ex-Mumbai and Rs 1,000 per tonne ex-Ludhiana but remained flat in Chennai, according to data from SteelMint.
Indian steelmakers welcomed the government's move as it may bring some respite to them following a quarter of dismal financial performance amid falling domestic steel prices and limited export market. "This will re-energise and further motivate the industry to move forward with full confidence to put the steel sector towards an inclusive growth path," said Dilip Oommen, the president of Indian Steel Association and CEO of ArcelorMittal Nippon Steel India.
The removal of the export duty will change the dynamics of exports with India's import-export matrix returning to its original state, said Brij Bhushan, the managing director of Shyam Metalics & Energy. India's net export of steel had reached multi-quarter lows since the imposition of the duty.
Roughly a fifth of steel produced in India is exported. During the six months when the duty was effective, exports of steel from India had crashed as Indian companies became uncompetitive in the global market.
Indian steel exports declined 53% during the first half of FY22 to 5 million tonnes. Exports of iron ore and pellets declined a steeper 63% to 18.9 million tonnes, as per data from SteelMint.
However, the upside from the duty removal may be limited as global steel prices remain low due to tepid demand, experts said.
Steel industry welcomes duty cut on steel exports - Economic Times
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