Indian steelmakers risk being hit by EU export tax deals, Jindal executive says

A worker cuts iron rods outside a workshop at an iron and steel market in an industrial area in New Delhi, India, December 12, 2017. REUTERS/Adnan Abidi/File Photo

Join now for FREE unlimited access to


NEW DELHI, May 22 (Reuters) – Indian steel companies could be forced to cancel European orders and suffer losses after an overnight decision to impose export taxes on steel products, said VR Sharma, Managing Director of Jindal Steel and Power (JNSP.NS). Reuters.

India imposed a 15% export tax on eight steel products on Saturday night, as steelmakers seek to offset weak local demand by increasing their market share in Europe, whose supplies have been squeezed. affected by the Russian invasion of Ukraine.

“They should have given us at least 2-3 months time, we were unaware of such a substantial policy,” Sharma told Reuters in an interview.

Join now for FREE unlimited access to


Sharma said Indian steelmakers have about 2 million tonnes of pending export orders, mostly to Europe, which are stuck in ports or at various stages of production.

“It could possibly lead to force majeure. And the client did nothing wrong here and he doesn’t deserve to be treated this way,” he said.

Russia and Ukraine exported 46.7 million tonnes in 2020, mostly to the European Union, the world’s second largest importer of steel, according to the World Steel Association.

The decision could increase industry costs by up to $300 million, he said.

“We alone have 260,000 tonnes of orders, which were taken when export duties were zero,” Sharma said.

JSPL, India’s fifth largest crude steel producer which competes with Tata Steel (TISC.NS), JSW Steel (JSTL.NS), SAIL (SAIL.NS) and ArcelorMittal Nippon Steel India, aimed to increase its exports by up to 40% in sales, mainly to Europe.

The export taxes on steel were part of a series of tax changes on key commodities aimed at curbing retail inflation, which has reached eight-year highs.

Removing import duties on coking coal, PCI coal and anthracite and imposing an export tax on iron ore, all essential raw materials used in the steel industry, might not not be enough to soften the blow to exports, Sharma said.

“Coking coal prices are still very high,” he said, adding that the export tax would benefit local automakers and other heavy engineering industries.

Join now for FREE unlimited access to


Reporting by Sudarshan Varadhan and Aftab Ahmed; edited by Jason Neely

Our standards: The Thomson Reuters Trust Principles.

Mary I. Bruner