In order to prevent massive import and protect the domestic industry, National Tariff Commission (NTC) is going to open probe into the import of steel wire rods as the commission's finding may pave way for an anti-dumping duty against the exporting country, it is reliably learnt.
Industry sources told Business Recorder on Wednesday that after several complaints from the domestic steel wire rod manufacturers, NTC has decided to initiate an investigation against the import of wire rods from China and called a meeting in the first week of March 2013.
"We are in touch with NTC for last few months on the issue and finally the commission has announced that it will convene a meeting of stakeholders on March 4, 2013 to discuss the import of wire rods in detail," a leading wire rod manufacturer said. Earlier, the meeting was scheduled for February 25, 2013, however it could not held due to unknown reasons, he added.
He claimed that the domestic industry has already collected authentic evidence that huge quantity of wire rod is being imported from China at low prices and this import is directly hurting the domestic manufacturers, besides spending of millions of dollars precious foreign exchange on the import of this commodity. "We will demand immediate imposition of regulatory duty on the import of wire rod and increase in valuation of as the NTC inquiry will take same three to four months," they added.
A large number of local wire rod manufacturers and steel melters have registered protest with federal government, Federal Board of Revenue (FBR) and NTC on import of alloy steel bars and wire rod from China, where there is a rebate of 13 percent on the export of alloy steel and 9 percent rebate on export of alloy steel wire rods.
Sources said that huge quantity of wire rod steel bars is being imported from China at lower prices; despite the fact the domestic industry has a sufficient production capacity to meet the country's demand. Recently, the domestic steel sector had made new investment in the industry, as a result Pakistan's local wire rod production has jumped to 400,000 tons per year, which is sufficient to cater the country's demand, which stood at 400,000 tons.
On the other hand, supported by low customs valuation, massive quantity of the wire rod is being imported from China and this massive import is directly affecting the local wire rod industry/manufacturers, already on the verge of collapse due to energy crisis. Although, wire rod price in the world market is in the range of $700-$750 per ton, its valuation is fixed at very low level by the customs authorities and releasing it at $575-$580 per ton.
Sources said ahead of these problems, Pakistan's domestic wire rod industry has approached FBR and NTC for imposition of anti-dumping duty on the import of wire rod from world's largest steel producer. They are expecting that NTC will initiate an inquiry after the first meeting with the stakeholders to check the cheap import of wire rod.
"Pakistan's exchequer can make billions of rupees by raising import duty from 10 percent to countervailing duties of 25 percent at least," they said. Increase in duty will raise collection of at least Rs 2 billion annually by national kitty in shape of revenue generation.
"During the last fiscal year some 200,000 tons of wire rod was imported at an average price of $650 per ton and revenue collection @ 10 percent customs duty tariff is $65 per tons. While, in case of 25 percent duty (like other countries), the government can get a duty of upto $162.5 per ton on import stage. Difference of tariff collection is approximately $100 per ton and cumulatively Rs 2 billion annually," they said.
In addition, imposition of duty will protect local industries, promise investment into the sector and grow our engineering industries. Therefore, the government should take measures to support local industries, create jobs and increase revenue collection in times of dire need, they added.
They urged the government to initiate inquiry against rising import of wire rod, adding that inquiry and imposition of anti-dumping duty will take some time, therefore for a short period the government should impose Regulatory Duty (RD) or enhance valuation of the wire rod.
Wire rod manufacturing industry is seeking immediate imposition of RD on the import of wire rod on temporary basis, in order to restrict the import. This duty may be lifted in case of imposition of anti-dumping duty. They said the European Union, Malaysia and Thailand have recently imposed anti-dumping duty on the import of wire rod from China to provide a safeguard to their domestic steel industry.
It should be realised that Pakistan's steel industry is in a very nascent stage and needs to be protected against low cost dumping of steel wire rods, bars and other finished steel products into the country. Dumping of steel products into the country will lead to closure of many plants and leading to massive unemployment in the country, they urged.
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