HR Flat Sheets and Plates of 150mm to
600mm under Safeguard Lens
· SAIL,
Essar and JSW Complain of Sudden Rise in Imports
· Provisional
Safeguard Duty of 20% Slapped on HR Coils of 600mm plus on 9 September 2015
On 10 December 2015, India notified the WTO’s Committee on
Safeguards that it initiated on 7 December 2015 a safeguard investigation on
Hot-rolled flat sheets and plates (excluding hot rolled flat products in coil
form) of alloy or non-alloy steel having nominal thickness less than or equal
to 150mm and nominal width of greater than or equal to 600mm.
[Safeguard
Investigation
Notice F.No. D-22011/47/2015 dated 7 December 2015]
Sub: Initiation of safeguard investigation
concerning imports of “Hot Rolled flat sheets and plates (excluding hot rolled
flat products in coil form) of alloy or non-alloy steel” into India.
1. An application has been filed before me on 28th
October, 2015 under Rule 5 of the Customs Tariff (Identification and Assessment
of Safeguard Duty) Rules, 1997 by M/S Steel Authority of India Limited, M/S Essar Steel India Limited, M/S JSW Steel Limited and M/S
Jindal Steel & Power Ltd through M/S Lakshmi Kumaran
& Sridharan Attorneys, New Delhi, for imposition
of Safeguard Duty on imports "Hot Rolled flat sheets and plates (excluding
hot rolled flat products in coil form) of alloy or non alloy
steel having nominal thickness less than or equal to 150mm and nominal width of
greater than or equal to 600mm" hereinafter referred to as ‘PUC’ (Product under
consideration) into
India to protect the
domestic producers of PUC against serious injury/threat of serious injury
caused by the increased imports of PUC into India.
2. Domestic Industry: The applicants, i.e., M/S Steel Authority of
India Limited, M/S Essar Steel India Limited, M/S JSW
Steel Limited and Jindal Steel & Power Ltd claimed that their production
together accounts for more than 50% of the total production of PUC in India and
it represent a major proportion of Indian production of the product under
consideration in the country and thus have the standing to file the present
application.
3. Product Involved: The product under consideration in the present
investigation is “Hot Rolled flat sheets and plates (excluding hot rolled flat
products in coil form) of alloy or non-alloy steel having nominal thickness
less than or equal to 150mm and nominal width of greater than or equal to
600mm” whether or not rolled from universal plate mill including reversible
plate mill or hot strip mill or tandem mill or steckel
mill or any other similar process with various type of rolling configuration
including 2-High, 3-High, 4-High, cluster mill or any similar hot rolling
process. The product under consideration is classified under Tariff Heading
7208 and 7225 (722540413, 72254019, 72254020, 72254030 and72259900) which are
directly substituting the products manufactured by the DI that fall under the
tariff heading 7208) of the Customs Tariff Act, 1975. These products include
sheets and plates produced either directly from the hot rolling process or cut
/ sheared from hot rolled coils. These products are flat products of iron,
alloy or non-alloy steel, in prime or non-prime condition having ‘as-rolled’
edge or ‘trimmed’ edge or “milled” edge or “sheared” edge or “laser-cut” edge
or “gas-cut” edge. These products may be pickled or non-pickled (with or
without skin-pass or tempering), normalized or un-normalized, ultra-sonically
tested or untested or oiled or non-oiled etc. These products may be “as-rolled”
or “thermomechanically rolled” or
“thermo-mechanically controlled rolled” or “controlled rolled” or “normalized
rolled” or “normalized” or subject to any other similar process. These products
may have patterns in relief / chequered patterns of
different types derived directly during hot rolling. These products may be sand
blasted or shot blasted or subjected to similar processes. These products may
find applications spread across various end-usages including but not limited to
structural applications, general engineering & fabrication, automotive,
earthmoving & mining equipment, storage tanks, low pressure heaters, treaters, tanks & other low pressure vessels, infrastructure
and construction sectors such as port, railway, airport, bridges, fly-overs,
power generation, transmission & distribution sector, wind-mill, ship
building & boats, tube & pipe manufacturing for transporting
semi-solid, liquid & gas.
By ample clarification, the following are not
included in the scope of the product under consideration:
a) Hot rolled flat products of stainless steel;
b) API grade steel conforming to X-52 and higher API
grades for manufacturing pipes used for pipeline transportation systems in the
petroleum and natural gas industries;
c) Hot rolled plates for manufacturing boilers and
pressure vessels confirming to IS 2002 and IS 2041;
d) Silicon electrical steel;
e) Cladded steel;
f) Quenched and tempered steel;
4. Period of Investigation (POI): The applicants have submitted all the data from
2012-13 to 2015-16 (up to Sept.,15). The period for
investigation selected is 2012-13 to 2015-16 (A) which is long enough in order
to take into consideration the market conditions and to ascertain the need of
imposition of Safeguard Duty.
5. Source of information: The transaction-wise import data for the ‘PUC’ has
been taken from DGCI&S (Ministry Of Commerce) from 2012-13 to 2015-16 (upto Aug,15) and same has been
taken into consideration for analysis. The domestic data from 2012-13 to
2015-16(up to Sept.,15) have been submitted by the
domestic industry and the same been taken into consideration for analysis.
6. Increased Imports (absolute &
in relative terms):
‘PUC’ is imported into India primarily from Indonesia, China PR, Japan, Korea
RP, Russia and Ukraine. The imports of ‘PUC’ have shown an increasing trend in
absolute terms as well as in relative terms during the period as shown in table
below:-
|
Year |
Total Imports (MT) |
Trend |
All India Production (MT) |
Import with respect to total production (%) |
|
2012-13 |
601,667 |
100 |
5264627 |
11 |
|
2013-14 |
323,723 |
54 |
5420737 |
6 |
|
2014-15 |
599891 |
100 |
5001044 |
12 |
|
2015-16(A) |
708816 |
118 |
5048846 |
14 |
7. Serious Injury: The applicant have claimed that the increased
imports of ‘PUC’ have caused and are threatening to cause serious injury to the
domestic producers of ‘PUC’ as indicated by the following factors:
(a) Production: The production of the domestic industry remained
at the same level as shown in the following table:-
|
YEAR |
Production of DI (MT) |
Trend |
|
2012-13 |
4649918 |
100 |
|
2013-14 |
4237844 |
91 |
|
2014-15 |
4303683 |
93 |
|
2015-16(A) |
4306260 |
93 |
(b) Market Share of domestic
producers in domestic demand:
Market share of the applicants has fallen in the most recent period. Applicants
had a market share of 73% in 2014-15 which fell to 70% during 2015-16 (A).
During the same period, the market share of import increased from 12% to 13%,
as shown below:-
|
Financial Year |
Total Import (MT) |
Sales of DI (MT) |
Captive consumption of DI (MT)
|
Sales of other Indian Producers
(MT) |
Total Demand (MT) |
Market Share (%) |
|
|
|
|
|
|
|
|
DI |
Import |
|
2012-13 |
601,667 |
3683111 |
439569 |
536201 |
5260548 |
70 |
11 |
|
2013-14 |
323,723 |
3662331 |
192398 |
994887 |
5173339 |
71 |
6 |
|
2014-15 |
599891 |
3768085 |
157747 |
639349 |
5165072 |
73 |
12 |
|
2015-16(A) |
708816 |
3771342 |
227971 |
694669 |
5402798 |
70 |
13 |
(c) Productivity & Employment: Since the applicant companies are multi-product
companies, the employment levels have not undergone any significant change and
productivity per day is as under:-
|
Financial Year |
Productivity per day(MT) (Indexed) |
|
2012-13 |
100 |
|
2013-14 |
91 |
|
2014-15 |
93 |
|
2015-16(A) |
93 |
(d) Capacity Utilisation:
During the
period, the capacity utilisation decreased from 45%
to 37% during 2012-13 to 2015-16(A) as evident from the table below:
|
Financial Year |
Installed Capacity (MT) |
Capacity Utilisation
(%) |
|
2012-13 |
10336260 |
45 |
|
2013-14 |
11159000 |
38 |
|
2014-15 |
11305667 |
38 |
|
2015-16(A) |
11589959 |
37 |
(e) Profit/loss – The profitability of the domestic industry has
declined sharply in 201516(A) and they have started recording losses as shown
in the following table:-
|
Financial Year |
Profitability (Rs. / MT)
(Indexed) |
ROCE (%) Indexed |
|
2012-13 |
100 |
100 |
|
2013-14 |
66 |
71 |
|
2014-15 |
39 |
43 |
|
2015-16(A) |
-230 |
-1 |
(f) Inventory- The table below depicts the inventory levels which
have witnessed a surge from 100 points in 2012-13 to 130 points in 2015-16(A).
|
Financial Year/Quarter |
Inventory (MT) (Indexed) |
|
2012-13 |
100 |
|
2013-14 |
104 |
|
2014-15 |
104 |
|
2015-16(A) |
130 |
8. The domestic industry has requested for immediate
imposition of safeguard measures for a period of four years in their
application. The domestic industry has also requested for imposition of
provisional safeguard duty in view of steep deterioration in performance of the
domestic industry as a result of increased imports of product under
consideration.
9. The application has been examined and it has been
found that prima facie increased imports of ‘PUC’ have caused or are
threatening to cause serious injury to the domestic producers of ‘PUC’ and
accordingly, it has been decided to initiate an investigation through this
notice.
10. All interested parties may make their views known
within a period of 30 days from the date of this notice to:
The Director General (Safeguards)
Bhai Vir Singh Sahitya Sadan: 2nd Floor, Bhai Vir Singh Marg,
Gole Market, New Delhi-110 001, INDIA.
Telefax: 011-23741542/ 23741537
E-mail: dgsafeguards@nic.in
11. All known interested parties are also being
addressed separately.
12. Any other party to the investigation who wishes to
be considered as an interested party may submit its request so as to reach the
Director General (Safeguards) on the aforementioned address within 15 days from
the date of this notice.
13. A public file containing all relevant material
(non-confidential) shall be available for inspection by all interested parties
in the office of the Director General (Safeguards) on the aforementioned
address.