HR Coils of 600 mm plus under Safeguard Duty Lens, 10% to 15%
Protection on the Anvil
• SAIL, Essar
and JSW Complain of Sudden Rise in Imports
• Safeguard Action Severe, All Imports
Regardless of Source will be Hit
• Downstream Users in Machinery and
Construction Affected, Exports will Suffer
• Fall in Profit of Domestic Industry
only in Last Three Months
• Recent Protection with Hike of Duty
to 12.5% from 7.5% is not Enough, Claims Industry
• Small Steel Plant Affected by Price
Crash but Complaint by Large Companies
[Safeguard
Initiation Notice F.No.
D-22011/26/2015/Pt-I dated 7th September
2015]
Sub: Initiation of safeguard
investigation concerning imports of “Hot-rolled flat products of
non-alloy and other alloy Steel in coils of a width of 600 mm or more” into India.
An application has been filed before
me on 27th July, 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, and M/S JSW
Steel Limited through M/S Lakshmi Kumaran & Sridharan Attorneys, New Delhi, for imposition of Safeguard
Duty on imports of “Hot-rolled flat products of
non-alloy and other alloy Steel in coils of a width of 600 mm or
more”, 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, and M/S JSW Steel Limited, 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 is “Hot-Rolled Flat Products of Alloy or Non-Alloy Steel in Coils
of a width of 600 mm or more” classifiable under Chapter 72 of the Customs
Tariff Act, 1975, under tariff heading 7208 and tariff item 72253090. The
applicant has claimed that these products are not further worked than
hot-rolled and are flat products of iron, alloy or non-alloy steel, in prime or
non-prime condition having ‘as-rolled’ edge or ‘trimmed’ edge or ‘slit’ edge.
These products may be pickled or non-pickled (with or without skin-pass or
tempering), slit or non-slit and having nominal width of greater than or equal
to 600mm. These products may be as-rolled or thermo-mechanically rolled or thermo-mechanically
controlled rolled or controlled rolled. These products may have patterns in
relief derived directly from rolling. These products may have been subjected to
various processing steps like pickling, oiling, rewinding, temper rolling, heat
treatment, etc.
The following are not included in
the scope of the product under consideration:
a) Hot-rolled flat products of steel with
nominal width less than 600mm;
b) API grade steel;
c) Silicon electrical steel;
d) Hot-rolled flat products of steel of spring
steel quality;
e) Hot-rolled flat products of steel which are electrolytically plated or coated with zinc;
f) Hot-rolled flat products of steel otherwise
plated or coated with zinc; and
g) Hot-rolled flat products of stainless steel.
4. Period of Investigation (POI): The
applicants has submitted all the data from 2011-12 to 2015-16 (Q1). The period
for investigation selected is 2013-14 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 IBIS for 2013-14
to 2015-16 (Q1) as provided by the domestic industry and same has been taken
into consideration for analysis. The domestic data from 2011-12 to 2015-16(Q1)
have been submitted by the domestic industry and the same have been verified by
on-site visit by the department on the basis of central excise records and
other records maintained in the units to the extent deemed necessary.
6. Increased Imports (absolute & in
relative terms): ‘PUC’ is imported into India primarily from China PR,
Korea RP, Japan and Russia. 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:-
|
Financial Year |
Total Imports (MT) |
Trend |
All India Production (MT) |
% of import with respect to
production |
|
2013-14 |
1292099 |
100 |
25510777 |
5 |
|
2014-15 |
2540114 |
197 |
26395795 |
10 |
|
2015-16(Q1) |
844840 |
|
6646258 |
|
|
2015-16(A) |
3379360 |
262 |
26585032 |
13 |
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 |
|
2013-14 |
17881187 |
100 |
|
2014-15 |
17836937 |
100 |
|
2015-16(Q1) |
4456795 |
|
|
2015-16(A) |
17827180 |
100 |
(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 45% in 2013-14 which fell to 37%
during 2015-16 (A). During the same period, the market share of import
increased from 6% to 12%, as shown below:-
|
Financial Year |
Total Import (MT) |
Sales of DI (MT) |
Sales of other Indian Producers
(MT) |
Captive sale of DI(MT) |
Captive sale of Others(MT) |
Total Demand (MT) |
Market Share (%) |
|
|
|
|
|
|
|
|
|
DI |
Import |
|
2013-14 |
1292099 |
10342565 |
2994323 |
4274000 |
4000724 |
22903711 |
45 |
6 |
|
2014-15 |
2540114 |
9949214 |
3298273 |
5019741 |
4615864 |
25423206 |
39 |
10 |
|
2015-16(Q1) |
844840 |
2589929 |
1065972 |
1321497 |
1180681 |
7002919 |
|
|
|
2015-16(A) |
3379360 |
10359716 |
4263888 |
5285988 |
4722724 |
28011676 |
37 |
12 |
(c) Productivity & Employment: The trend
of employment and productivity remained same throughout the period as shown in
the table below:-
|
Financial Year |
No. of Employees (Indexed) |
Productivity per employee(MT)
(Indexed) |
|
2013-14 |
100 |
100 |
|
2014-15 |
100 |
100 |
|
2015-16(Q1) |
100 |
|
|
2015-16(A) |
100 |
100 |
(d) Capacity Utilisation: During the
period, the capacity utilisation remained same during 2013-14 to 2015-16(A) as
evident from the table below:
|
Financial Year |
Installed Capacity (MT) |
Capacity Utilisation (%) |
|
2013-14 |
23568996 |
76 |
|
2014-15 |
23568996 |
76 |
|
2015-16(Q1) |
5884372 |
|
|
2015-16(A) |
23537488 |
76 |
(e) Profit/loss – The profitability of the
domestic industry has declined sharply in 2015-16(Q1) and they have started recording
losses as shown in the following table:-
|
Financial Year |
Profitability (Rs. /MT) (Indexed) |
|
2013-14 |
100 |
|
2014-15 |
135 |
|
2015-16(Q1) |
(55) |
(f) Inventory- The table below depicts
the inventory levels which have witnessed a surge from 100 points in 2013-14 to
103 points in 2015-16(A).
|
Financial Year/Quarter |
Inventory (MT) |
Inventory (MT) (Indexed) |
|
2013-14 |
636879 |
100 |
|
2014-15 |
648290 |
102 |
|
2015-16(Q1) |
657099 |
103 |
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.