- 23 May 2022
- ICICIdirect Research
Export duty imposed on steel intermediaries, major steel products
News: Export duty has been levied on steel intermediaries and key steel products. Export duty of 15% (from Nil earlier) has been levied on almost all the major steel products (including Stainless Steel). Key items on which export duty of 15% is levied includes pig iron, flat-rolled products of iron or non-alloyed steel, bars and rods and various flat-rolled products of stainless steel, etc. In the case of iron ore and concentrates, the duty has been raised to 50% on all categories, up from 30% (furthermore the 30% export duty was earlier applicable only for lumps that were above 58% iron content). In the case of iron ore pellets, which currently does not attract export duty, a 45% duty has been imposed. To reduce the cost of domestic production of steel products, import duty on coking coal and anthracite has been reduced from 2.5% to zero while the same on coke and semi-coke has been brought down from 5% to zero. The import duty on ferronickel has been lowered from 2.5% to zero
Views: On the back of Russia Ukraine conflict there was a healthy uptick witnessed in global steel prices over the last few months. Exports had become a lucrative market for domestic players due to healthy realisations. However, the recent step to levy export duty on various steel products would lead to reasonable quantum of volumes to be shifted to the domestic markets. Also accessing the current lucrative global export would come at a cost. The import duty on key steel making raw material such as coking coal has also been reduced to Nil from 2.5% earlier. However, on a net effect, the negatives on account of levy of export duty of 15% on some of the key steel products exceeds the small benefit of cut in import duty of coking coal.