Steel imports to be costlier by up to Rs 1,500 per tonne on hike in Customs duty
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State-owned Steel Authority of India today said imports of steel would be costlier by Rs 1,000-1,500 per tonne due to a hike in customs duty on flat products.
"Now, import duty on flat steel has been increased from 5 to 7.5 per cent. Thus, the import of steel for flat products will become costlier by around Rs 1,000-1,500 per tonne," SAIL Chairman C S Verma told reporters.
Asked whether SAIL, the country's largest steel maker, would increase the price, Verma said, "I can't say, as there are 7-8 days to go before the end of the month. We will have to make a demand and supply situation analysis and if the market permits and can absorb, we will take a call accordingly."
Steel firms generally review prices at the beginning of a month on the basis of the demand-supply situation at that point of time.
"This is the last quarter of the 11th Plan period and of the current fiscal. There has been brisk demand and we are liquidating our stocks. Demand is more than supply in India today," Verma said.
The duty hike, though not to the extent of the demand of the domestic steel makers, who wanted it to be 10 per cent, is aimed at discouraging imports of steel from countries such as China, Russia, Korea and Brazil. The move would ensure more business for the domestic steel industry.
Following the announcement of hike in duty in the Budget on March 16, domestic steel firms had said that there could be a price rise by up to Rs 1,000 per tonne.
"The hike in excise duty rates is going to increase cost. Two per cent increase in excise duty means costs will go up by Rs 500 to Rs 1,000 per tonne. It will be passed to consumers," Jindal Steel and Power's CFO Sushil Maroo had said.
An Essar Steel official said the price hike would be to the tune of extent in duty increase.
Rashtriya Ispat Nigam (RINL) Chairman A P Choudhary said, "Certainly, this (increase in excise tax rates) will have impact on prices, but the extent will depend on the absorbing capacity of the market."