Business Standard

Monday, September 08, 2003

China urges India to check steel exports
Indian exports exceeded 3 per cent quota norm set for developing nations

Ishita Ayan Dutt in Kolkata
Published : September 8, 2003

The Chinese government has issued its first warning to the Indian
government: 'Curb steel exports to China or face safeguard measures'.
Industry sources said the Chinese govenment has written to the Indian
embassy, which in turn was forwarded to the steel ministry, asking Indian
steel companies to check exports.

While galvanised steel product exports were the single largest export by
product, the Chinese government's warning pertained to flat product exports
as a whole.

The trigger-point for the letter was a series of shipments which pushed
Indian flat product exports to China in excess of 3 per cent norm set on
exports from developing nations to China. This has technically exposed
Indian exports to the risk of attracting safeguard measures.

SAIL sources said the main items of export to China were hot rolled coils
(HRC), plates and galvanised products.

The two items mentioned specifically in the letter to the embassy were
colour coated and galvanised products. China imports around 15 million tonne
flat products.

Ispat sources said, China, which imported 24.5 million tonne in the whole of
last year, has till now imported more than 20 million, with the bulk of it
being flat products.

However, industry sources pointed out that even if China decides to impose
safeguard duty, it would be after a process of consultation with the
government and the companies. "China would at least give a hearing to the
developing nations," they said.

Moreover, some steel representatives said they had started controlling
exports to China. Steel exports to China have been rising over the last
couple of years, largely due to the Beijing Olympics in 2008. Out of the 3.7
million exports last year, China alone lapped up one million tonne.
But, steel companies were apprehensive that safeguard measures in China
would have a worst impact on them, than the US antidumping duty on HRC
imposed some time ago.

"Realisations in China were much better than the US and exports to China
have been across categories and not just HRC" they said.

For instance, the HRC prices in China increased by as much as $20-30 per
tonne since end-May 2003, when the new quotas were announced.

According to some sources, while major steel companies were controlling
exports and adhering to the limits, it was the smaller steel companies which
were exporting aggressively.

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