Global Steel backs imminent tariff hike

Global Steel Philippines Inc. (GSPI) the country’s largest steel manufacturer, said an increase in steel tariff will help develop the local industry and lessen dependence on imported steel.

"It is indeed ironic that imports continue to flood the local market on one hand, while Global Steel, which manufactures competitively priced, world-class steel products, is forced to export 70 percent of its production to its overseas customers," GSPI managing director Lalit Sehgal said in a statement.

Leaders of the steel industry, especially those in the galvanizing sector, have expressed concern that the impending increase in tariff rates of hot-rolled coils (HRC) and cold-rolled coils (CRC) as provided under Executive Order 375 will lead to higher prices of construction materials.

Manufacturers, specifically those in the iron and steel industry, explained that raw materials for the manufacture of reinforcing bars and roofing sheets such as billets, HRC, CRC and zinc are basically imported.

This means an increase in the prices of the imported raw materials, a direct result of EO 375 which more than doubles the tariff to seven percent from three percent, will result in higher domestic prices of construction materials.

The steel industry’s flat products sector likewise expressed concern on the implementation of the tariff hike as it will unduly penalize producers and burden end-users. 

However GSPI, the firm who took over National Steel Corp. (NSC) in Iligan, has petitioned the government for tariff protection.

"Importers who allege that the implementation of EO 375 will lead to price hike of HRC and CRC are deliberately misleading the public," Sehgal said.  "This baseless claim is being done only to discredit the viability of serious large-scale steel producers, and encourages import or trading businesses, regardless of domestic supply and capability, undermining the country’s long-term development priorities and requirements."

 GSPI also claimed there is a need to recalibrate the existing tariff from three percent to seven percent for HRC and CRC.

"International prices and demand determine domestic prices, and any tariff increase serves to protect the country from the influx of low-quality steel products and threats to the continued viability of large steel manufacturers," Sangram Mohanty, GSPI head of corporate communications said.