JSW Steel Raises Worry Over Increased Colour Coated Imports in India

India's one of the biggest steel producers JSW Steel recently conducted its earnings call for the third quarter of FY18 (Sep to Dec'18) and the major concern that the company expressed is the dramatic surge in country's colour coated steel imports.

According to the company's officials, although steel imports in India moderated over the last few months, imports of colour coated steel products remained at an elevated level, thus pressurising domestic producers. As reported in customs data, India's imports of colour coated products increased by a staggering 250% y-o-y basis during Apr-Dec'17.

Presence of colour coated counterfeit products in the market

Another major issue that the company is dealing with is the presence of counterfeit products in the market. According to market reports, JSW Steel has recently cracked down on counterfeit lookalikes of 'Colouron+' its popular colour-coated product.

The company even conducted raids in Maharashtra, NCR (National Capital Region), Karnataka and Tamil Nadu with the support of local law enforcement authorities and confiscated over 780 counterfeit steel sheets during the raids. These products are majorly imported from China and Vietnam and are being sold as JSW product at a 15 to 20% discount.

As per JSW Steel officials, the company has moved to the Bureau of Indian Standard (BIS) and has got the quality order for colour-coated sheet imports notified. These BIS norms will be applicable from Jan'18 and the imports of colour coated products are expected to restrict in the coming months as majority of Vietnamese mills have not been issued the BIS licenses.

India's GP/GC imports surges in CY17

While India's flat steel imports plunged from 8.63 MnT in in 2015 to 6.14 MnT in 2017, country's GP/GC imports registered an increase especially in the second half of CY17.
According to customs data, India's import of GP/GC peaked in the month of Oct'17 and was recorded at 0.15 MnT. During Jan-Dec'17, GP/GC imports from South Korea, China, and Japan constituted to 70% of the total imports.

The country's domestic manufacturers were pressurising the government since long to impose trade restrictions on the imports of galvanised and colour coated products in order to guard the interest of domestic players.

In Oct'17, Indian government announced imposition of anti-dumping duty on imports of GP/GC and colour coated products coming from China and European Union which is set to be applicable from 11 Jan'18 for next five years.

However, as per SteelMint analysis, the trade barrier imposed by way of anti-dumping duty is likely to become ineffective as the imported GP/GC and colour-coated sheet prices are much higher than the base price mentioned in the anti-dumping duty order.