Indian Govt Undertakes Mid-Term Review of Anti-Dumping Duty on Graphite Electrode Imports

Indian Govt Undertakes Mid-Term Review of Anti-Dumping Duty on Graphite Electrode Imports

Supply shortage of Graphite electrode has been severe in the recent months. To get relief from this major problem Alloy Steel Producers Association of India (ASPA) had requested the DGAD (Directorate General of Anti-Dumping Duty), which comes under ministry of commerce, for initiation of a mid-term review of the anti-dumping duties imposed on the imports of Graphite Electrode originating in or exported from China.

Earlier in 2015, the Finance Ministry imposed the anti-dumping duty on graphite electrodes imports from China, based on recommendations of the Directorate General of Anti-Dumping Duty (DGAD) for five years. The duty ranges between USD 278.19 and USD 922.03, the duty imposed being variable and specific to various companies from China.

What is Mid-Term Review?

Mid-term Review is undertaken by the Designated Authority any time during the period of 5 years when the levy Anti-Dumping duty is in force, wherein the duty may be continued, modified or revoked. Such review can be undertaken only if a reasonable period of time has elapsed since the imposition of the definitive anti-dumping duty. Upon such review, the Designated Authority shall recommend to the Central Government for its withdrawal, where it comes to a conclusion that the injury to the domestic industry is not likely to continue or recur, if the said anti-dumping duty is removed or varied and is therefore no longer warranted. Any mid-term review initiated needs to be concluded within a period not exceeding twelve months from the date of initiation of such review.

What is the reason for a review?

The electrode prices in India have risen exponentially in the past few months due to low availability, lower imports on account of the anti dumping duty & this has led to acute shortage of graphite electrodes in market creating major problem for the steel manufactures through the EAF route.

The elimination of the Anti-Dumping Duty will help the steel makers to source the electrodes from international markets. Moreover, coupled with a significant rise in global Graphite Electrode prices – which will lead to a similar increase in landed value of Graphite Electrode imports, the injury margin has come down and as a consequence, a need for reviewing the current level of duties has arisen.

What will be the likely impact?

According to data with SteelMint, the imports of graphite electrodes in FY’14 (12,800 MT) & FY’15 (13,700 MT), saw an increase in cheaper imports from China which flooded the Indian graphite market. As a result the DGAD, to protect the domestic industry, imposed anti-dumping duty on imports from China in 2015.

The import market became dormant in FY16 (6,800 MT) & FY17 (4,000 MT) after anti-dumping duty was levied – resulting in decline of imports by 40% China was the largest supplier of graphite electrode to India. Notably, despite the presence of Anti-Dumping Duty, around 3,870 MT of the electrodes were imported during 2017, according to the data available with SteelMint.

Withdrawal of the Anti-Dumping Duty would somewhat ease the soaring cost pressure on the country’s steelmakers in importing the electrodes as the electrode prices have been rising to record levels on account of stronger demand and dwindling supply. Hence, as the rationale that was there when the duty was imposed does not exist today – it makes sense to revoke the duty.

 

Source: Steel 360 India