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Indian steel companies unfazed by US duty threat

Indian steel companies, which have been diversifying into new export markets over the past two years, will not be affected if the US decides to slap new restrictions on steel imports, analysts and company officials said on Wednesday.

"There will be no effect. Indian companies have been reducing their exposure to the United States," said an analyst with a local brokerage.

US President George W Bush on Tuesday asked the country's International Trade Commission to investigate whether imports are harming US steel makers.

"I am deeply concerned... about the situation of the US steel industry," Bush said. He said he will send a letter to ITC within the next two weeks directing it to launch a probe under section 201 of the 1974 Trade Act.

If the ITC investigation finds evidence US steel makers are being hurt by imports, section 201 would allow Bush to restrict steel imports for an initial period of up to four years.

Unlike other American trade remedy measures, section 201 does not require the ITC to determine foreign producers are illegally pricing or subsidising their steel exports - only that US producers have been harmed.

Reaction by the Indian industry and analysts to the news was muted.

"Even if they slap new restrictions, companies would move over to other markets like before," said an official of a large Indian steel maker, who asked not be named.

About 20 per cent of India's total steel exports of 2.7 million tonnes last year went to the United States.

Big exporters like the Steel Authority of India Ltd, Essar Steel Ltd and Tata Iron and Steel Company Ltd have been branching out into other markets over the past two years as the United States again moved to protect American producers against cheap imports.

"We have been shifting exports to China and Iran as demand is good," said a spokesman of Essar Steel Ltd, which last year exported 600,000 tonnes.

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