India's largest steel producer, JSW Steel, will continue to supply products to its buyers in Europe without passing on any increase in costs despite New Delhi's decision to impose an export tax, a senior company official said on Monday.
India recently imposed an export tax of 15 per cent on some steel products from zero, at a time the country's steelmakers were looking to make up for tepid local demand by increasing market share in Europe, where the Ukraine conflict has hit supplies.
The government also scrapped import duty on coking coal, a key steelmaking raw material, and raised export tariffs on iron ores and concentrates to 50 per cent from 30 per cent.
After New Delhi's decision to slap the export tax, analysts had warned that the move would force steel companies to curtail overseas shipments.
But JSW Steel would still supply to its European buyers, Seshagiri Rao, joint managing director and the group financial head of JSW Steel, told Reuters in an interview.
"They (European buyers) were expecting India will accelerate (steel shipments)," Rao said. "The customers will not see me tomorrow if I stop it (exports)."
Despite the export tax, JSW Steel would not pass on any extra costs to its buyers, Rao said.
"I have to take that loss," he said, adding India could consider waiving the steel export once inflation eases.
The Mumbai-based company is looking to gain from a drop in domestic iron ore prices and the scrapping of import duty on coking coal to negate the impact of the steel export tax.
The state-run iron ore producer NMDC recently cut prices by 10 per cent and 15 per cent on high-grade lump and fines respectively.
In the fiscal year to March 2022, JSW Steel produced a record high 17.62 million tonnes of crude steel. The steelmaker exported an overall 4.57 million tonnes of steel, an increase of 8 per cent year on year, and exports accounted for 28 per cent of its total sales.
Indian steel mills exported 18 million tonnes of steel in 2021/22, with 4 million tonnes of shipments to Europe.