Economy, Business And Markets

10-20% Anti-Dumping Duty Imposed on Steel Imports

10-20% Anti-Dumping Duty Imposed on Steel Imports10-20% Anti-Dumping Duty Imposed on Steel Imports

In a meeting between the ministry of industry, mine, and trade and steel manufacturers, it was decided that 10-20 percent duty will be imposed on the import of steel products, in a bid to protect domestic steelmakers against China's dumping policy, announced deputy industry minister, Mehdi Karbasian.

"In order to protect domestic steel manufacturers, the importers of steel products are not provided with foreign currency at official exchange rate (which is usually 20% below the market exchange rate), except for importing a few steel products that are not manufactured domestically," Eghtesadnews quoted the deputy minister as saying.

“Until December last year, steel importers could use hard currency at official exchange rates to import steel products such as ingots, which in turn led to mounting pressure on domestic manufacturers. We hope the new decision will help the steel market to grow and enjoy fair competition”, said Karbasian.  

The new duties imposed by the ministry are different from the import tariffs as the latter need the parliament’s ratification whereas the administration is authorized to impose import duties without the parliament’s permission. The import duty is considered as a means by which the government can regulate the market or protect domestic industries.

Steelmakers, already hit hard by inflation and increased costs, have come under additional pressure due to the unprecedented downturn in the housing and construction sector during the past three years. They have been holding back to back meetings with the ministry officials over the past few months, calling for higher import tariffs on steel products, warning authorities that if necessary measures are not adopted to reduce the import of steel products from China and India (which have been dumping their steel in Iran’s markets at low prices), many small and medium-scale steel companies in the country could go bankrupt.

“Another problem for domestic steelmakers, especially the state-owned companies, was irregular recruitments imposed by the former administration. The Esfahan Steel Company (ESC), for instance, was pressured to recruit thousands of employees, which led to additional costs for the company,” said Karbasian.

Aside from the chaos in the market, steel manufacturers have been facing difficulties in providing sufficient raw materials for their mills. In 2013, the majority of the iron ore produced in the country was exported. Iran exported some 24 million metric tons of iron ore that year, nearly 90% of which was to China. But iron ore exports substantially decreased the following year due to global decline in prices. Another reason behind the considerable decrease in iron ore exports in 2014 was the new policies pursued by the government in the steel sector.

In line with the 2025 Vision Plan, which requires the steel sector to produce 55 million tons of crude steel by the next decade, the administration of President Hassan Rouhani decided to develop the processing units and complete the country’s steel production chain. Huge domestic and foreign capital has been so far attracted, mainly by the Iranian Mines & Mining Industries Development & Renovation (IMIDRO), to establish processing units and expand the steel plants.

“Millions of tons of iron ore were exported over the past years, which hampered the development of the domestic steel sector. When an iron ore mine is taken over by an individual or a mining company, there should be a certain plan to process the mineral after extraction. This is the only way to develop the steel industry and create employment”, IRNA cited chairman of Iran House of Industry, Mine, and Trade, Abdolvahab Sahlabadi as saying.

The official predicted that the upcoming Iranian year (to start March 21) could be one of the best years for domestic steel manufacturers, “as the new policies formulated by the industry ministry restricts the export of raw iron ore, leading to  higher value addition in the sector by processing the iron ore to more valuable materials.”