The India Stainless Steel Export Tax is Planning to Decrease?
In order to control the surge in domestic steel prices and curb inflation, the Ministry of Finance of India imposed a 15% export tax on the export of some products on May 22. The stainless steel involves coils with a width of 600mm and above, bars, angles and other profile products. The taxed products account for a relatively high proportion of India's stainless steel exports, exceeding 60%. How much the export of related products will be affected after the tax is imposed, see the details below.
India's stainless steel exports fell 24% month-on-month
According to data, in June 2022, India's stainless steel exports were about 64,800 tons, a month-on-month decrease of 20,000 tons or 23.84%; a year-on-year decrease of 16,800 tons, a decrease of 20.57%. The cumulative export volume from January to June 2022 is about 546,800 tons, an increase of 94,500 tons or 20.89% year-on-year.
Exports of taxed products fell sharply
From the perspective of export products, India's stainless steel exports are dominated by coils with a width of ≥ 600mm, bars, angles and other profile products, which account for more than 60%, and the cumulative proportions from January to June are 34% and 28%, respectively. The increase in the 15% export tariff imposed by India this time is precisely these two, it has a greater impact on India's stainless steel exports.
Due to the export tax, the export advantages of coils with a width of ≥ 600mm, bars, angles and other profiles have weakened, and exports have declined significantly.
In terms of the export of coils with a width of ≥600mm: In June 2022, India's export volume was about 15,100 tons, a decrease of 16,600 tons or 52.24% month-on-month; a year-on-year decrease of 10,200 tons, a decrease of 40.25%. From January to June 2022, the cumulative export volume is about 187,200 tons, an increase of 70,900 tons or 61% year-on-year.
The volume of wide coils exported to the EU plummeted by as much as 61%
In June, India's stainless steel exports fell the most for coil products with a width of ≥ 600mm, and their exports were mainly to Europe and the United States and other countries. Among them, the volume exported to the EU decreased by 8,300 tons to 5,300 tons, a decrease of 60.9%; the volume exported to the United States decreased by 2,300 tons to 6,100 tons, a decrease of 27.7%.
The decline in exports to Europe and the United States is due to the decline in export advantages after India's stainless steel exports are taxed, on the other hand, due to the long-term inflationary pressure in Europe and the United States, consumption has been suppressed and stainless steel demand has weakened.
Indian steel export tariffs may be cut
Executives from major steel companies are reported to have met India's Finance Minister Nirmala Sitharaman in June. Negotiations to review export tariffs on steel and iron ore have also not been finalized.
Some steelmakers said they understood the need to control inflation and the need to procure some short-term measures such as export taxes, and hoped to remove the tax once inflation slowed.
In early August, it was reported that the Indian government may abolish export duties on steel in stages, giving priority to reducing export duties on flat products (including hot-rolled coils, cold-rolled coils and plate, etc.) Export duties on construction steel will continue to be levied.
Seshagiri Rao, co-managing director of JSW Steel, said he expected the export tax to be lowered by the end of September. But there are also senior industry insiders who say it may be faster.
