Steel mills hike prices despite custom duty reduction

Indian steel mills have hiked the price of the hot-rolled coil by Rs 1,000-1,500 per tonne this week, despite a reduction in the customs duty on a list of steel products announced in the Union Budget in a bid to bring down high domestic prices.

State-owned Steel Authority of India Ltd (SAIL) increased the price by around Rs 1,000 per tonne, while ArcelorMittal Nippon Steel (AMNS) and JSW Steel increased it by around Rs 1,500. Other steelmakers are expected to follow the trend.

However, steel mills cut down the price of TMT bars by around Rs 3,500 per tonne this week, citing the global demand-supply scenario, said sources.

Currently, the hot-rolled coil prices stand at Rs 54,000-55,000 a tonne, almost a 55% rise since it hit the lowest in February 2020 at Rs 36,000-38,000. Price of TMT bars is now at Rs 62,500-65,000 depending on the quality and size.

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While announcing the budget, Finance Minister Nirmala Sitharaman said customs duty would be reduced to 7.5% from 12.5% on semis, flat, and long products of stainless steels, non-alloy and alloy. The budget also has exempt duties on steel scrap temporarily and suspended countervailing duties and anti-dumping duties on certain products.

Reacting to the budget, top steelmakers and analysts said the customs duty reduction would have minimal impact on the domestic prices as most of the imports are from free-trade agreement countries like South Korea and Japan.

As we have been reporting over the past few months, steel price rise, while good news for manufacturers of the material, has been a cause of concern for the construction and infrastructure industry.

Click here to know current steel prices.

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