Economy, Business And Markets

Hollow Steel Section Producers Decry High Import Tariffs

Hollow Steel Section Producers Decry High Import TariffsHollow Steel Section Producers Decry High Import Tariffs

Despite previous announcement by authorities that the import tariff on steel sheets with thickness under 3 millimeters would not be increased, the tariffs were raised from 4% to 15%, causing concerns for the domestic manufacturers of hollow steel section; a member of the Steel Pipe and Profile Manufacturers Syndicate, Mehdi Abooei-Mehrizi told Donya-e Eghtesad economic newspaper.

“Based on an agreement between the syndicate and the Mobarakeh Steel Company – the leading manufacturer of steel sheets in the country – it was proposed that the import tariff on hot-rolled steel sheets less than 3 millimeters in thickness would remain unchanged,” said the board member.

Following several pleas by the Iranian Steel Producers Association (ISPA) to protect the domestic steel manufacturers against steel dumping by giant steel exporters such as China, the administration finally increased import tariffs in February to 10% for steel ingots, 15% for steel sheets, and 20% for steel sections. Steelmakers had for months urged the government to impose higher import tariffs on steel products, arguing that the absence of protective import tariffs on Chinese or Indian steel products would lead to closure of many domestic steel mills.

But, based on the decisions, higher tariffs were not supposed to be imposed on steel products and sections which are not produced in the domestic market, including thin hot-rolled steel sheets.    

Now, despite pledges by the government to protect the domestic steelmakers, the manufacturers of hollow steel sections find it hard to continue operation, since they are the main consumers of thin hot-rolled steel sheets for which they are required to pay a 15% import tariff.

Abooei-Mehrizi strongly criticized the imposition of high tariffs, saying: “After months of conflict between the ISPA and the industry ministry, the cabinet claimed that it has made the new decisions to protect the domestic steel manufacturers. But setting a 15% tariff on thin steel sheets has created an unfavorable situation for the hollow steel sections market.”

“Protection by the governments should be temporary and conditional. Our industries should be able to adapt themselves to global markets,” said the syndicate’s deputy chairman, Ebrahim Hosseini. “Unfortunately the administration has not paid enough attention while making the decision because no tariff was to be imposed on steel products which are not produced domestically.”

According to Hosseini, the new 15% import tariff on thin hot-rolled steel sheets prevents the domestic manufacturers from exporting high quality steel sections and reduces their competitiveness in global markets against rival countries such as Turkey.