Indian private-sector producer JSW Steel expects the new steel export duties to be temporary and said it will continue its exports.
The steelmaker will continue to export around 15-20pc of its overall sales to service global customers, despite the duties. The company expects the duties will be lifted once inflation comes under control. JSW Steel raised its production and sales guidance for the financial year ending March 2023 because of a positive outlook for steel demand.
"Domestic prices majorly depend on landed cost of imports. If international prices get corrected, domestic prices will also get corrected," JSW Steel said.
The steelmaker clarified that export duties will be applied to cargoes that were not cleared by customs. "Whatever we have to clear with export duty payment, we'll be doing under protest because of clause 1.05 of the foreign trade policy. In the past, precedence is there that the LCs [letter of credits], which have been issued and contracts valid, those will be allowed to be exempted. So that is the assumption based on which we would be paying under protest," JSW's deputy managing director Jayant Acharya said. Duties paid under protest are eligible for refund subject to conditions.
The Indian government imposed a 15pc tax on exports of some steel products on 22 May, stoking concerns among steelmakers about the viability of shipments in the seaborne market.
Domestic Indian hot-rolled coil and rebar prices have been declining since before the tax announcement because of tepid demand.
The company said that its expansion projects — such as the Vijayanagar plant, which is being expanded by an additional 5mn t, downstream projects at Vasind and Tarapur, and the expansion of Bhushan Power and Steel to 3.5mn t/yr — are already in advanced stages and a review of those because of the export duties is unlikely. Future expansion plans may be considered depending on how long the duties remain in place, it said.
