1. Home
  2. Building Material
  3. Steel
  4. Domestic steel sector hits by moving train post govt’s duty steps
Domestic steel sector hits by moving train post govt’s duty steps
Steel

Domestic steel sector hits by moving train post govt’s duty steps

25 May 2022 2 Min Read CW Team
The domestic steel sector has been hit by a moving train, rating agency Icra said reacting to the duty-related steps taken by the government.

On Saturday, the government increased the duty on iron ore exports by up to 50% and a few steel intermediaries by 15%. It also declared waiving of customs duty on some raw materials imports, including ferronickel and coking coal, utilised by the steel industry.

On Monday, Icra said the steel industry has been hit by a moving train as the government cracks the whip and charges an export duty to reign in raised costs. Nearly 95% of India's finished steel export basket has been hit with 15% export duties.

Domestic steel prices could potentially correct by 10%-15% in the forthcoming months as demand enters the seasonally weak monsoon quarter.

Icra further said expansion plans of many steelmakers could also be affected if the duties are maintained in the medium term.

Jayanta Roy, Senior Vice-President, and Group Head, Corporate Sector Ratings, Icra, told the media that Indian mills registered a 25% year-on-year (YoY) increase in finished steel exports as they took the advantage of raised seaborne prices in FY22. Vietnam, Europe, and the Middle East were the three largest destinations for Indian steel exports, jointly accounting for approximately 50% of India's overall steel exports.

Many of these destinations would become less appealing now as mills estimate the economics of a higher duty. Also, with steel export offers for deliveries to Europe is increased by 10%-11% over more competitive markets like South-East Asia and the Middle East, the negative impact of the new export duties on steel exports to Europe would be somewhat less intense than that of South-East Asia and the Middle Eastern markets, he said.

Image Source

Also read: Govt waives customs duty on imports of certain raw materials

The domestic steel sector has been hit by a moving train, rating agency Icra said reacting to the duty-related steps taken by the government. On Saturday, the government increased the duty on iron ore exports by up to 50% and a few steel intermediaries by 15%. It also declared waiving of customs duty on some raw materials imports, including ferronickel and coking coal, utilised by the steel industry. On Monday, Icra said the steel industry has been hit by a moving train as the government cracks the whip and charges an export duty to reign in raised costs. Nearly 95% of India's finished steel export basket has been hit with 15% export duties. Domestic steel prices could potentially correct by 10%-15% in the forthcoming months as demand enters the seasonally weak monsoon quarter. Icra further said expansion plans of many steelmakers could also be affected if the duties are maintained in the medium term. Jayanta Roy, Senior Vice-President, and Group Head, Corporate Sector Ratings, Icra, told the media that Indian mills registered a 25% year-on-year (YoY) increase in finished steel exports as they took the advantage of raised seaborne prices in FY22. Vietnam, Europe, and the Middle East were the three largest destinations for Indian steel exports, jointly accounting for approximately 50% of India's overall steel exports. Many of these destinations would become less appealing now as mills estimate the economics of a higher duty. Also, with steel export offers for deliveries to Europe is increased by 10%-11% over more competitive markets like South-East Asia and the Middle East, the negative impact of the new export duties on steel exports to Europe would be somewhat less intense than that of South-East Asia and the Middle Eastern markets, he said. Image Source Also read: Govt waives customs duty on imports of certain raw materials

Next Story
Infrastructure Urban
05 Nov 2024

BorgWarner extends transfer case business with North American OEM

BorgWarner, a global product leader in delivering innovative and sustainable mobility solutions, is furthering its business with a major North American OEM by securing extensions on two transfer case contracts for upcoming vehicle launches with new platform requirements. BorgWarner will supply two types of transfer cases, including its active Electro-Mechanical On-Demand 2-Speed (EMOD) and a part-time Electric Shift-on-the-Fly 2-Speed (ESOF) transfer case. Two of the OEM’s combustion and hybrid passenger truck platforms will be equipped with the EMOD and ESOF, while an additional passenger t..

Read More
Next Story
Infrastructure Transport
05 Nov 2024

CII partners with Hunch Mobility for Urban Air Mobility Expo 2025

The Confederation of Indian Industry (CII) has announced its partnership with Hunch Mobility to host the upcoming Urban Air Mobility Expo 2025. This significant event aims to showcase advancements in urban air mobility, a rapidly evolving sector that promises to revolutionize urban transportation. Scheduled for 2025, the expo will serve as a platform for industry leaders, innovators, and policymakers to converge and discuss the future of air transport within urban environments. Key topics will include technological innovations, regulatory frameworks, and infrastructure development necessary f..

Read More
Next Story
Infrastructure Urban
05 Nov 2024

HCL Tech opens first delivery centre in Kochi

HCL Technologies has officially inaugurated its first delivery centre in Kochi, marking a significant expansion in its operational footprint in India. This new facility aims to enhance the company’s capabilities in delivering a wide range of technology services to its clients. The Kochi delivery centre will focus on various areas, including software development, IT services, and digital solutions, contributing to HCL's commitment to driving innovation and improving service delivery. With this initiative, HCL Tech aims to tap into the region's growing pool of skilled talent, particularly in ..

Read More

Opinion Poll

Question : Which technological advancement do you believe will most transform the real estate industry in the coming years?

Latest updates

BorgWarner extends transfer case business with North American OEM
ECONOMY & POLICY
05 Nov 2024

BorgWarner extends transfer case business with North American OEM

CII partners with Hunch Mobility for Urban Air Mobility Expo 2025
AVIATION & AIRPORTS
05 Nov 2024

CII partners with Hunch Mobility for Urban Air Mobility Expo 2025

HCL Tech opens first delivery centre in Kochi
ECONOMY & POLICY
05 Nov 2024

HCL Tech opens first delivery centre in Kochi

Ambuja plans expansion through acquisitions
Cement
05 Nov 2024

Ambuja plans expansion through acquisitions

Telangana forms 25 urban development bodies for growth
ECONOMY & POLICY
05 Nov 2024

Telangana forms 25 urban development bodies for growth

OMS signs contract for cable-laying vessels
ECONOMY & POLICY
05 Nov 2024

OMS signs contract for cable-laying vessels

Sitharaman urges G7/G20 support for Africa
ECONOMY & POLICY
05 Nov 2024

Sitharaman urges G7/G20 support for Africa

JSW and POSCO collaborate for steel plant
Steel
05 Nov 2024

JSW and POSCO collaborate for steel plant

Hi There!

"Now get regular updates from CW Magazine on WhatsApp!

Join the CW WhatsApp channel for the latest news, industry events, expert insights, and project updates from the construction and infrastructure industry.

Click the link below to join"

+91 81086 03000