Tata urges anti-dumping penalties on Chinese steel
Tata Steel Plc has asked the government to impose anti-dumping duties of at least 20 per cent on steel wire from China as the company struggles to compete against subsidised imports that are as much as 14 per cent cheaper than its own products in the loca
Vice president Thana Reungsilasing said Chinese steel wire is priced between Bt17,000 and Bt18,000 per tonne, compared to Bt21,000 for the domestic variety.
"Steel wire is our major product, accounting for about 40 per cent of our total production capacity of 1.2 million tonnes a year," he said.
Chinese firms can sell steel wire at below Thai market prices because Beijing subsidises the products in the form of export tax rebates of about 9 per cent. At the same time, the firms declare their steel wire exports to be a compound of boron and chromium, which qualifies them for import duty exemptions.
"When they declare the products to be steel wire, they would face import tax of 5 per cent. That means they save tax of about 19 per cent when exporting to Thailand. As a result they can sell at lower than domestic prices," Thana said.
He added that if the government did not protect local producers, they would have to switch from steel wire to other products that can compete with imports.
Tata Steel president and CEO Peeyush Gupta reported to the Stock Exchange of Thailand that the temporary stoppage of mini blast furnace (MBF) operations at NTS Steel Group Plc, a Tata subsidiary, would continue until March 31 next year. The furnace was temporarily closed in August 2011 due to high raw material prices (specifically iron ore and coke), which led to higher operating costs.
Although the prices of raw materials have eased in last two months, cheap imports from China have put unprecedented pressure on finished goods prices, making it financially unviable to restart the furnace, the firm said. Accordingly, NTS Steel will continue to operate by using scrap sourced from the local market in its electric arc furnace instead of hot metal from the MBF.
The company said it would continue to closely monitor the trend of raw material prices and changes in the market environment with an eye on returning its operations to normalcy.
Tata Steel reported total revenue of Bt5.9 billion and net loss of Bt200.85 million in the first quarter of this fiscal year.
