Indian ferrous groups seek duty changes in union budget
Steel's inclusion under the Remission of Duties and Taxes on Exported Products (RoDTEP) scheme and a reduction in import duties for steelmaking raw materials are the top asks of Indian ferrous associations from the country's 2023-24 union budget.
India's finance minister Nirmala Sitharaman will present the union budget for the financial year 2023-24 on 1 February.
Industry bodies such as the Indian Steel Association (ISA), Federation of Indian Chambers of Commerce and Industry (FICCI) and the Federation of Indian Mineral Industries have recommended the Indian government to include the iron and steel sector under the RoDTEP scheme that will help the industry's competitiveness in the global market.
The government included iron and steel's chapter 73 items that includes tubes, pipes etc. under RoDTEP in December to boost exports, but the industry groups seek complete inclusion of the sector, especially chapter 72 consisting of top exported items such as semi-finished steel products, flat-rolled products etc. The RoDTEP scheme rebates or refunds the embedded central, state and local duties taxes to the exporters.
Duties to discourage imports
The ISA has also urged the government to impose anti-dumping and countervailing duties to prevent the dumping of certain steel products at predatory pricing.
It has further sought to reinstate the basic customs duty from the existing 7.5pc ad valorem to 12.5pc for flat steel and 10pc for long steel, as was the case before 1 February 2021. It has also sought imposition of a 25pc safeguard duty to counter imports in a Tweet today.
The steel association has further recommended a Border Adjustment Tax (BAT) which can be levied on finished steel imports to provide a level playing field for the domestic industry. BAT is a destination-based tax system where goods and services are taxed based on where they are consumed.
The call for increasing taxes on imported steel comes following the second-largest steel-producing country turning a net importer of steel during the October-December quarter.
Finished steel imports rose last month to their highest since August 2019, at 653,000t. That was an increase of 8.7pc on the month and a 65pc rise from a year earlier, joint plant committee data show. Firm demand in India during a global slump in global steel prices in the past months prompted countries such as Russia, Vietnam, Japan, Korea and China to export steel in the country.
But market participants and importers believe the volume of imports has not been high enough for the government to act on this recommendation, while free trade agreements with some of these countries will further deter the government.
Relief on raw material costs
Both ISA and FICCI have asked the government to reduce the import duty on coking coal and other raw materials, such as ferro-nickel and ferro-chrome, to zero.
The government brought back an import duty of 2.5pc on anthracite/pulverised coal injection, coking coal and ferro-nickel and of 5pc for coke and semi-coke on 19 November, which were removed in May.
Indian steel industry imports about 90pc of coking coal for steelmaking. Record-high coking coal prices in 2022 pushed domestic steel prices to an all-time high. Weather-related disruptions in Australia and China's impending return in the Australian coking coal market are expected to keep coking coal prices volatile. Coking coal from Australia is exempt from the import duty since 29 December following a free trade agreement.
The Material Recycling Association of India (MRAI) is urging the government to continue with the existing zero duty on ferrous scrap imports. The government last year extended the reduction in customs duty imposed on ferrous scrap and waste imports to zero until 31 March 2022.
Until India generates sufficient quantity and quality of scrap from the domestic market, zero import duty will help to create a level playing field for the Indian recycling industry, MRAI president Sanjay Mehta said.
Related news posts
US job growth nearly halved in April: Update
US job growth nearly halved in April: Update
Adds services PMI in first, fifth paragraphs, factory PMI reference in sixth paragraph. Houston, 3 May (Argus) — The US added fewer jobs in April as the unemployment rate ticked up and average earnings growth slowed, signs of gradually weakening labor market conditions. A separate survey showed the services sector contracted last month. The US added 175,000 jobs in April, the Labor Department reported today, fewer than the 238,000 analysts anticipated. That compared with an upwardly revised 315,000 jobs in March and a downwardly revised 236,000 jobs in February. The unemployment rate ticked up to 3.9pc from 3.8pc. The unemployment rate has ranged from 3.7-3.9pc since August 2023, near the five-decade low of 3.4pc. The latest employment report comes after the Federal Reserve on Wednesday held its target lending rate unchanged for a sixth time and signaled it would be slower in cutting rates from two-decade highs as the labor market has remained "strong" and inflation, even while easing, is "still too high". US stocks opened more than 1pc higher today after the jobs report and the yield on the 10-year Treasury note fell to 4.47pc. Futures markets showed odds of a September rate cut rose by about 10 percentage points to about 70pc after the report. Services weakness Another report today showed the biggest segment of the economy contracted last month. The Institute for Supply Management's (ISM) services purchasing managers index (PMI) fell to 49.4 in April from 51.4 in March, ending 15 months of expansion. The services PMI employment index fell to 45.9, the fourth contraction in five months, in today's report. Readings below 50 signal contraction. On 1 May, ISM reported that the manufacturing PMI fell to 49.2 in April, after one month of growth following 16 months of contraction. In today's employment report from the Labor Department, average hourly earnings grew by 3.9pc over the 12 month period, down from 4.1pc in the period ended in March. Job gains in the 12 months through March averaged 242,000. Gains, including revisions, averaged 276,000 in the prior three-month period. Job gains occurred in health care, social services and transportation and warehousing. Health care added 56,000 jobs, in line with the gains over the prior 12 months. Transportation and warehousing added 22,000, also near the 12-month average. Retail trade added 20,000. Construction added 9,000 following 40,000 in March. Government added 8,000, slowing from an average of 55,000 in the prior 12 months. Manufacturing added 9,000 jobs after posting 4,000 jobs the prior month. Mining and logging lost 3,000 jobs. By Bob Willis Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
US met coal suppliers expect belated supply tensions
US met coal suppliers expect belated supply tensions
London, 3 May (Argus) — US coking coal prices have so far brushed off any impact of the collapse of the Francis Scott Key bridge in Baltimore on 26 March and the subsequent disruption of vessel traffic via the Port of Baltimore. Suppliers such as Arch Resources and Blackhawk that utilise the Baltimore shipping route have sought effective alternative arrangements so far and buyers have been largely comfortable despite some delays in laycans. Other suppliers such as Northern Appalachia's largest producer, Consol Energy's Bailey mine , which is a key supplier to Atlantic end-users, have faced more challenges, market participants suggest. The decline in fob Australia coal prices from last year's highs amid improved supply availability has also weighed on prices. The Argus assessed premium low-volatile coking coal fob Australia price was at $242.80/t on 3 May, largely unchanged from $254/t on 26 March after reaching a low of $224/t on 8 April. The US east coast prices have followed a similar trajectory, with low-volatile fob US east coast at $215/t today down from $220/t on 26 March after falling to a low in April. Low European demand has been one of the reasons behind the tepid response to coking coal shipment delays from the US. But with expectations of at least some recovery in the second half of 2024 and still no firm date on when the Baltimore traffic will return to normal, some US suppliers suggest coking coal prices may face some upward pressure later this year. Luxembourg-based steelmaker ArcelorMittal has kept its apparent steel demand outlook in Europe unchanged for 2024, expecting a growth of 2-4pc on the year . European steel association Eurofer downgraded its apparent steel consumption outlook for 2024 again , to 3.2pc from a previous forecast of 5.6pc, owing to worsening geopolitical tensions, economic uncertainty, energy prices, inflation and higher interest rates. But this would still be an improvement from a 9pc fall in steel consumption in 2023. There is also optimism among US coal suppliers that Brazil may be a source of renewed demand in the coming months with domestic steel production expected to improve. The Brazilian government is due to increase taxes for some imported steel products after facing pressure from the domestic steel industry to apply tariffs on imports, in particular on Chinese steel. Taxes will be increased to 25pc on 11 steel products — mainly flat rolled — contingent on such import levels exceeding prescribed quotas, the trade ministry's committee on foreign commerce, Gecex/Camex, said. Brazil's crude steel output reached 31.9mn t in 2023, down by 6.5pc on the year, World Steel Association data show. In the US, the fall in seaborne met coal prices also points to potential consolidation in the sector and the possibility of supplies tightening down the road. Industry participants highlight that some of the small and mid-sized mining operations that have emerged in the past two years amid a strong price environment are struggling. Bens Creek Group, which operates the Bens Creek Mining project in West Virigina with around 30,000-35,000st (27,200-31,800t) per month of coking coal output, filed for Chapter 11 bankruptcy in April. The year-to-date average price of high-volatile A for 2024 stands at $242.62/t fob Hampton Roads and is estimated to be above production costs for some of these mines. In 2022, high-volatile A prices averaged $347.81/t fob Hampton Roads, driven by a combination of market concerns over the Russia-Ukraine conflict and supply disruptions in Australia. While Russian coking coal remains available and competitively priced in the market, in particular a key supply source for China, US sanctions will continue to put pressure on major coal importers such as India and South Korea to reduce their Russian imports. The US announced fresh sanctions against Russian coal producer Sibanthracite's group of companies earlier this week. By Siew Hua Seah Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
US job growth nearly halved in April
US job growth nearly halved in April
Houston, 3 May (Argus) — The US added fewer jobs in April as the unemployment rate ticked up and average earnings growth fell, signs of gradually weakening labor market conditions. The US added 175,000 jobs in April, the Labor Department reported today, fewer than the 238,000 analysts anticipated. That compared with an upwardly revised 315,000 jobs in March and a downwardly revised 236,000 jobs in February. The unemployment rate ticked up to 3.9pc from 3.8pc. The unemployment rate has ranged from 3.7-3.9pc since August 2023, near the five-decade low of 3.4pc. The latest employment report comes after the Federal Reserve on Wednesday held its target lending rate unchanged for a sixth time and signaled it would be slower in cutting rates from two-decade highs as the labor market has remained "strong" and inflation, even while easing, is "still too high". US stocks opened more than 1pc higher today after the jobs report and the yield on the 10-year Treasury note fell to 4.47pc. Futures markets showed odds of a September rate cut rose by about 10 percentage points to about 70pc after the report. Average hourly earnings grew by 3.9pc over the 12 month period, down from 4.1pc in the period ended in March. Job gains in the 12 months through March averaged 242,000. Gains, including revisions, averaged 276,000 in the prior three-month period. Job gains occurred in health care, social services and transportation and warehousing. Health care added 56,000 jobs, in line with the gains over the prior 12 months. Transportation and warehousing added 22,000, also near the 12-month average. Retail trade added 20,000. Construction added 9,000 following 40,000 in March. Government added 8,000, slowing from an average of 55,000 in the prior 12 months. Manufacturing added 9,000 jobs after posting 4,000 jobs the prior month. Mining and logging lost 3,000 jobs. By Bob Willis Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
UK decoiler Atlantic Steel enters administration
UK decoiler Atlantic Steel enters administration
London, 3 May (Argus) — Birkenhead-based decoiler Atlantic Steel filed for administration yesterday, according to a filing seen by Argus . The company has been under pressure since its previous owners took a large chunk of cash out of the business as part of a management buyout in 2022. Credit insurers began to pull cover on the business towards the end of last year, and suppliers have been calling retention of title, which protects suppliers in the event of insolvency or bankruptcy, in recent days. Sources suggest the debt of the business at the time of administration is around £18mn. The previous owners are preferential creditors after the banks, as they were due another £5mn from the business, according to Companies House filings. Market sources suggest it is likely the business will be bought out of administration, with other service centres interested in the assets — the lease on the site expires in the next few years but is extendable, and Atlantic operates the largest decoiler in the UK, capable of decoiling over 2.5m wide. It is also situated on the dock at Birkenhead, which cuts inland transportation costs. The UK HRC market has been under pressure for a number of months, in line with the struggles seen in Europe. Argus ' weekly assessment was £605/t ddp West Midlands on 2 May, down from a recent peak of £700/t at the start of February. The assessment reached an all-time high of £1,200/t on 31 March 2022, and the management buyout took place later that year. By Colin Richardson Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Business intelligence reports
Get concise, trustworthy and unbiased analysis of the latest trends and developments in oil and energy markets. These reports are specially created for decision makers who don’t have time to track markets day-by-day, minute-by-minute.
Learn more