1 February 2023 – The Indian government’s review process on countervailing duties (CVD) against Chinese stainless steel finally seems to be moving forward. The Indian stainless steel industry is eagerly awaiting the upcoming date. Molybdenum prices break through $80,000/MT mark in Europe. And can the European steel producers no longer meet their delivery dates?
Molybdenum prices keep rising
Chinese and European molybdenum prices have risen significantly after the end of the Chinese New Year. After prices had already jumped at the beginning of the week, EU molybdenum oxide prices surpassed the $ 80,000 per tonne mark yesterday. Thus, the rising trend in 316 and 316L stainless steel grades is likely to continue as Chinese molybdenum prices also continue to point upwards.
Countervailing Duties against Chinese Stainless Steel?
India has already imposed countervailing duties (CVD) of about 18.95% against hot and cold flat-rolled stainless steel imports from China since 2017. The review process started in 2021 and has been dragging on since then without any result. Now, however, there seems to be movement in the review process and the Oral Hearing on 3 February 2023 is eagerly awaited in the Indian stainless steel industry.
Media machine already active
For several days now, Indian media have been postulating that progress must now be made in this countervailing duty review. Sometimes in one direction, calling for an end to the measures, sometimes in the other direction, seeing the demise of the Indian stainless steel industry looming if the punitive tariffs against China are lifted. Especially after the recently released figures of the Jindal Group report a drastic slump in net profits in Q3 2023 by almost 68%.
Is India pulling up the protection of its domestic steel industry?
The Indian steel industry is in deep crisis, as is evident from the recent example of the Jindal Group. Since 2022, the group’s exports have plummeted. While exports accounted for 23% of total sales in 2021, they plummeted to 5% in 2022. This is a hard slap in the face for the Indian stainless steel giant, which had only just managed to save itself from one crisis or another and had to undergo a tough restructuring programme for years.
In addition, India continues to have a problem with the production of steel, or with sufficient electricity supply. In 2022, this led to nationwide power cuts and a slump in production, not only of steel and stainless steel, but also of aluminium.
Continued protection against Chinese stainless steel imports would be a welcome help. Just like the Indian market protection measures against competition from Indonesia from 2021.
What is the Indian government’s interest?
The Indian government, on the other hand, has an interest in keeping prices in the country at a bearable level. Therefore, the political interest is likely to continue to lean in the direction of stabilising prices at home, but preventing the steel industry from dying off to replace China as the dominant steel nation.
Will the measure be tightened?
So it remains to be seen what decision is likely to be taken here soon. The powerful Indian steel lobby is likely to prevail here and a lifting of the countervailing duties is unlikely. The tariffs may even increase.
Asked for his assessment, Thorsten Gerber, CEO of the Gerber Group, said today: “We have all experienced what happens when certain Indian market participants can earn more on the domestic market. Deliveries were delayed, prices renegotiated or, in the worst case, orders were simply cancelled.”
Are European mills not meeting delivery deadlines?
Market sources tell us that European mills’ delivery times seem to be getting further and further behind. Although they still advertise and sell with moderate delivery times. This raises the question of whether this is simply a sales tactic or whether we are already much deeper into a possible shortage situation on the European market than previously assumed.
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Disclaimer: Many things here represent our opinion. Others are information from the Internet. We can therefore never claim to be correct or complete. And never base a business decision solely on the news you receive from us.