Union Budget 2014: Import duty on stainless steel up 7.5%, to help domestic firms

[Editor: Rohit Ferro-Tech Ltd's (Rs.12.64) much awaited 67 MW captive power plant (at its Jajpur unit, Odisha), is likely to come up by September, 2014--the scrip is already reacting to the positive news and is moving up, since the last couple days. Moreover, the CDR money has already started to flow, into the company, which is meeting working capital and other requirements. It is to be noted that the company earlier, went in for restructure of its loan portfolio. Besides, the company's Manganese alloys production facility of 100,000 mtpa with 6 nos. 9 MVA furnaces in Haldia, West Bengal is working fine. NONE of the company's plants are are CURRENTLY CLOSED according to my close sources--all are RUNNING. This is just a baseless rumour spread by some vested interest groups. In April 9, 2008, the company incorporated a wholly owned subsidiary in Singapore named SKP Overseas Pte Ltd and acquired economic interest in two coal mining companies in Indonesia with a reserve of 20 million tonnes of Thermal Coal and 5 million tonnes of Coking coal. Also, Rohit Ferro-Tech Ltd, started operations in the thermal coal mine during the year 2008-09. Today, the scrip hit the upper circuits at Rs.13.50, before closing at Rs.12.64; as the Sensex ended the day with a net loss of 348.40 points. 
On 11 July, 2014, Steel Guru writes: Import duty on flat rolled products of stainless steel hiked from 5% to 7.5% percent (Budget: 2014-15). 
Impact: Theoretically, price of imported flat rolled products of stainless steel will rise benefiting Indian flat rolled stainless steel producers and cost of end users of this type stainless steel would rise by about INR 4000 per tonne to INR 5000 per tonne considering current prices of about USD 3000 per tonne to USD 4000 per tonne for 304 and 316 grades respectively. But as major volumes of imports take place from South Korea and Japan, the impact of import duty hike would not be this extant due to FTAs. However, thousands of small users could be impacted due to some price rise in domestic market]

Photo: DDN

Thursday, July 10, 2014: New Delhi: In a major relief to domestic stainless steel industry, reeling under severe under- utilisation of capacity, the government Thursday increased import duty on flat-rolled products from 5 percent to 7.5 percent.

Presenting his maiden Budget, Finance Minister Arun Jaitley said this was done to provide an impetus to domestic stainless steel industry.

"The domestic stainless steel industry is presently suffering from severe under-utilisation of capacity.

"To give an impetus to the stainless steel industry, I propose to increase the basic customs duty on imported flat- rolled products of stainless steel from 5 percent to 7.5 percent," he said.

The domestic stainless industry has been facing a threat in the form of a sudden and immense surge in imports from various countries, especially China, primarily because of the current import duty which is considered to be on the lower side in comparison to other nations.

China has an average customs duty of 10 percent and Brazil, 14 percent.

Taking opportunity of lower customs duty, imports from these countries were on the rise in recent times.

India's imports of stainless steel surged to 307,226 tonnes in 2013-14 from 239,136 tonnes in 2011-12, reporting a growth of nearly 30 percent.

Domestic makers have been demanding 15 percent duty. They were also demanding removal of the basic customs duty on key raw materials and on scraps to ensure the domestic stainless steel industry can manifest itself as a globally competitor.

India now ranks as the third largest consumer and producer of stainless steel.

Industry sources said country's stainless steel consumption was expected to grow at 8-9 per annum annually to reach around 3.5 million tonnes by 2015. 

Courtesy: Zeebiz