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Centre acts to check steel prices

Special Correspondent

Duty on long steel products, iron ore up

NEW DELHI: In a significant move to shore up steel availability and contain rising prices in the domestic market, the government on Friday increased the export duty on long steel products from 10 to 15 per cent and imposed an ad valorem duty on iron ore exports.

It, however, withdrew the export duty on flat steel products as was promised to the industry at the time of the rollback in steel prices.

The increases in duty, effective immediately, have come in the wake of the steel price hike to the extent of 50 per cent since this January. This, in turn, added to the inflationary spiral which touched a seven-year high of 8.75 per cent for the week ended May 31.

Exemption

An official statement said: “Flat rolled products of iron and steel including galvanised products, pipes and tubes that attracted export duty ranging from five to 15 per cent ad valorem have been fully exempted from export duty.”

However, for increased supplies of long steel products such as bars and rods, angles, shapes, sections and wires, the export duty has been increased from 10 to 15 per cent. Alongside, ending the controversy between steel-makers and ore exporters, the export duty on iron ore — major raw material for steel production — has been fixed at 15 per cent ad valorem, irrespective of the iron content in it.

Hitherto, an export duty at Rs. 300 a tonne was imposed on iron ore lumps and fines with over 62 per cent iron content and Rs. 50 a tonne on lower grade ore.

“In order to strengthen a policy regime that enables conservation of good quality ore and ensures its availability to domestic industry at a reasonable price, the effective rate of duty on iron ore has been enhanced to a uniform rate of 15 per cent ad valorem, irrespective of iron ore content,” the statement said.

At loggerheads

Steelmakers and iron ore producers have been at loggerheads over the export of iron ore. While steel producers have been demanding curbs on overseas sale, the mining industry says the ore that is being exported is of no use to domestic steelmakers.

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