Indian steelmakers risk being hit by EU contracts due to export tax – JSPL executive


India imposed a 15% export tax on eight steel products late Saturday, a time when steelmakers seek to offset lukewarm local demand by increasing their market share in Europe, whose supply has t affected by the invasion of Ukraine by Russia.

“They should have given us at least 2-3 months time, we were unaware of such a substantial policy,” Sharma said in a Reuters interview.

Mr. Sharma said Indian steelmakers have about 2 million tonnes of pending export orders, mostly to Europe, which are stuck in ports or at various stages of production.

“It could potentially lead to force majeure. The client did nothing wrong here and he doesn’t deserve to be treated this way,” he said.

Russia and Ukraine exported 46.7 million tonnes in 2020, mostly to the European Union, the world’s second-largest steel importer, according to the World Steel Association.

The decision could increase industry costs by up to $300 million, he said.

“We alone have 260,000 tonnes of orders, which were taken when the export duties were zero,” Mr. Sharma said.

JSPL, India’s fifth largest crude steel producer, which competes with Tata Steel, JSW Steel, SAIL and ArcelorMittal Nippon Steel India, aimed to increase its exports up to 40% of sales, mainly towards Europe.

The steel export taxes are part of a series of changes to taxes on key commodities aimed at containing retail inflation, which has hit record highs in eight years.

The removal of import duties on coking coal, PCI coal and anthracite and the imposition of an export tax on iron ore, all essential raw materials used in steelmaking, may not be enough to mitigate the blow to exports, Sharma said.

“Coking coal prices are still very high,” he said, adding that the export tax would benefit local automakers and other heavy industries.



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