Anti-dumping duty on coated steel will raise solar project costs by 2-4%: Care Ratings

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Acting on a complaint by domestic manufacturer JSW Steel Coated Products, India’s Directorate General of Trade Remedies (DGTR) has provisionally determined dumping margins for aluminium- and zinc-coated flat products from manufacturers in China at 30-50%, Korea (20-30%) and Vietnam (10-20%) and recommended imposition of provisional anti-dumping duty on the same.

The move may, however, impede the growth of solar power in India as Care Ratings opines that imposition of anti-dumping duty will increase the cost of solar power projects by 2-4%.

The ratings agency cites the example of PosMAC (POSCO magnesium-aluminium alloy coated steel)—one of the imported products that has self-healing system, prevents corrosion from red-rust at edge, and is suitable for solar structure fabrication and support structure owing to its economic life of 25 years.

“These supporting structures cost approximately Rs 0.30 to 0.35 crore per MW, i.e., 8.5-10% of the total project cost of Rs 3.50 crore per MW. Hence, anti-dumping duty at above-mentioned dumping margins may increase tariffs by approximately 6 to 8 paisa per unit,” it said.

As per the DGTR, imports of aluminium- and zinc-coated flat products have increased relative to consumption in India. Imports sharply increased from 5-10% of consumption in 2015-16 to 35-40% of consumption during the 12-month period of investigation, i.e., October 2017 to September 2018.

There is substantial demand from the solar energy sector, where solar panels require aluminium-and zinc-coated flat products of 30 MT/MW for mounting structures.

It is estimated that the solar sector will require 2.1 million tonnes of aluminium- and zinc-coated flat products to achieve the ambitious solar energy target of 70 GW by 2022.