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Indian Steel Ministry: A Message for US Steelmakers

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Nov. 20 2020, Updated 10:40 a.m. ET

Indian steel ministry

Most steel associations from India (EPI) to the US have blamed steel imports, especially from China, as their biggest challenge. As cheap steel from China flooded domestic markets, steel companies appealed to their governments for relief. Governments obliged steel companies in different ways. While the US imposed punitive duties, in some cases upwards of 500% on Chinese imports, India introduced a minimum import price to fend off Chinese steel.

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Higher steel prices

We have started to see an increase in steel prices globally. The price increase is partially due to rising input costs, as we noted in the previous part. Higher steel prices concern authorities because it could stoke inflation. Recently, the Indian Steel Ministry expressed concern about rising steel prices. It said that steelmakers shouldn’t be allowed to “exploit the country.” The ministry also talked about striking a balance while defending its move to protect domestic steel producers from allegedly dumped steel products.

Protectionism

US steel buyers have also been crying foul about rising protectionism. As steel prices increase, the downstream steel industry’s global competitiveness is impacted negatively. While US steelmakers like U.S. Steel Corporation (X), AK Steel (AKS), and Nucor (NUE) want the Trump Administration to act decisively against steel imports, authorities might want to address steel buyers’ concerns alongside major trading partners like South Korea, Japan, and Europe. Read Steel Could Be the Trump Administration’s Biggest Test to find out why it wouldn’t be easy for President Trump to bail out the US steel industry (MT).

In the next part, we’ll see why higher coking coal prices could be a challenge for US steelmakers.

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