India imposes duty on the South Korean ferro-molybdenum imports
India has placed a safeguard duty on the imports of ferro-molybdenum originating from South Korea. This decision was taken in a bid to offer respite to its domestic converters. The duty, which came into effect on 10 October 2023, is set at 5% for the first year until 9 October 2024. From then on, until 10 October 2025, it will be reduced to 3.75%.
The call for imposing this duty was first suggested by the country's director-general of trade remedies around the end of May. This recommendation followed an inquiry that began in September 2022, initiated upon the appeal of India's ferro-alloy producers association. The investigation revealed that the imports from South Korea, which enjoyed duty exemptions under the bilateral free trade agreement, led to the domestic production capacities being underutilized. This had caused significant harm to the industry.
Request Access To The Latest Price Trends of Steel
Local converters in India are optimistic that this safeguard measure will bolster their market share shortly. However, they remain uncertain about its potential to drive the expansion of production capacity, particularly given the subdued demand from the Indian steel sector.
As per data, South Korea stands as India's primary external source for ferro-molybdenum. Between January and July, India's imports amounted to 2,010 tons, of which South Korea contributed 1,238 tons. Despite being the top supplier, there has been an 11.5% drop in imports from South Korea during the January-July period compared to the previous year. This reduction is attributed to the looming uncertainty around the duty imposition and the weak demand from the steel industry.
On the other hand, there's speculation among traders that India might pivot towards Thailand for its ferro-molybdenum needs. Notably, Thailand's imports, which stand exempt from the duty, surged to 120.88 tons in the January-July period from being non-existent the prior year.
According to the article by Procurement Resource, India has imposed a safeguard duty on ferro-molybdenum imports from South Korea to protect its domestic converters. Effective from 10 October 2023, the duty is 5% for a year, then 3.75% till 10 October 2025.
Read More About Steel Production Cost Reports - Get Free Sample Copy in PDF
This move followed an investigation showing duty-free imports under the free trade agreement led to underutilization of domestic production. Although optimistic, local converters are wary due to low steel demand. Despite a 11.5% drop in imports from South Korea, it remains India's main supplier. Meanwhile, duty-free imports from Thailand are rising.