Jindal Stainless Ltd (JSL), the country’s largest stainless steel maker, is seeking a re-imposition of countervailing duties (CVD) on Chinese stainless steel imported into the country.

Chinese imports are at least 19 per cent cheaper than Indian ones.

Calling for protection of Indian businesses, JSL, in a letter to the Revenue Secretary, Sanjay Malhotra, said that China became “the world’s biggest” net exporter of stainless steel flat products since 2010 , with the country building capacities and producing far more than local demand. “The surplus found its way into India and other major stainless steel producing and consuming countries through dumped and subsidised exports,” read the letter.

A copy of the letter has also been forwarded to the Ministry of Steel.

It has also been argued by JSL that countries like Brazil, Malaysia, Mexico, South Korea, Taiwan, Thailand, the USA, Vietnam, and the European Union nations have imposed duty on shipments coming in from China – for instance on cold rolled coils, stainless steel strip and so on. Some of these duties are in-force, since 2013.

DGTR investigation

Incidentally, JSL is the second Indian company, after the Steel Authority of India Ltd (SAIL) to raise the issue.

As per findings of an investigation carried out by the Directorate General of Trade Remedies (DGTR), Chinese imports into India shot up to 44 per cent (on an annualised basis) after suspension of CVD since February 2021. It stood at 49 per cent (annualised basis) for a nine-month period in 2022.

SAIL, while referring to an investigation carried out by the DGTR and its April 6 recommendation, which mentioned that the Chinese products in question – called 200 series – were subsidised and “caused injury”, with players here losing market share to the extent of 20–30 per cent.

JSL, referring to the same series 200, flat product grades,-wrote: “....about 50 percent of imports of 200 series products were priced below direct cost of Indian industry; while one third of imports were below the raw material costs in India.” A copy of the letter is with businessline.

As per trade sources, raw materials plus utilities(power) cost constitute 80 per cent of the total cost. While in India raw material cost – which is 60 – 70 per cent is market determined, in China it is government controlled, giving Chinese mills an advantage. Power cost continue to be government controlled in both countries.

Indian players hit

Building its case, the company said, it saw a capacity utilisation of just about 77 per cent due to production curtailment because of increase in imports. “Further in (the) 200 series, JSL made consistent losses in those grades which competed against Chinese imports,” it wrote.

And with imports – which JSL mentioned as dumping – going up, there is “colossal damage to Indian industry”. The company further pointed out, for instance, SAIL’s Salem unit has extremely low capacity utilisation and is being forced to go for disinvestment; BRG Iron and Steel Co is under NCLT and is subsequently acquired by Rimjhim Ispat; Rimjhim Ispat, Lohia Alloys and Valley Iron and Steel all have underutilised capacity while Shah Alloys was under BIFR and has low capacity utilisation. MSME players are the worst hit.

Import intensity in the downstream segment is low, and in the absence of import competition, they remain in a better position to pass on price increase or reduction, it has been argued.

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