Steel prices rise as safeguard duty on imports approaches

Steel prices in India have increased by 3-4% recently. This rise comes as there are talks about a possible 15% safeguard duty on steel imports. Such a duty aims to protect local steel producers from cheaper foreign imports. However, industries that rely on steel, like automakers and construction companies, are concerned about rising costs. The Directorate General of Trade Remedies (DGTR) recommended this safeguard duty to help domestic steelmakers. An official announcement is still pending. Darpan Jain, the DGTR's director general, said that the proposal is currently under review. Analysts warn that if the duty is implemented, domestic steel prices could also jump. Ravi Saxena, a manufacturer of kitchen utensils, expressed concerns about the negative impact on consumers. He believes that the duty should apply to finished products rather than raw materials. Saxena argues that higher raw material costs would hurt competitiveness and lead to higher prices for consumers. A report from BigMint, a market intelligence firm, shows that prices of hot-rolled coil steel have risen to their highest level since August 2024. Market speculation about the safeguard duty has created volatility in pricing. If the government goes ahead with the duty, it may help domestic steel producers, but it could lead to increased costs for essential materials. Ajay Srivastava, from a New Delhi think tank, cautioned against a blanket duty. He noted that different types of steel would be affected unequally, leading to potential price increases in essential construction materials. Currently, India is witnessing strong growth in steel consumption, outpacing other major economies. Steel imports have surged, especially from countries like South Korea, China, and Japan, while exports have decreased significantly. This has turned India into a net importer of steel, despite being the second-largest producer globally.