Government scraps 7% tariff on steel coils

MANILA, Philippines - The government has scrapped the seven-percent tariff on imported cold rolled coils (CRC) and hot rolled coils (HRC) as Iligan-based Global Steel failed to provide 50 percent of domestic demand.

An industry source revealed that the Tariff Commission has reduced the tariff to zero because according to the agreement between Global Steel and the government, a tariff of seven percent will be imposed on imported CRC and HRC provided the Indian-controlled company can meet at least 50 percent of local demand.

The source said Global Steel has been unable to meet the requirement. The seven-percent tariff will be restored if and when Global Steel will be able to follow the order which requires that the firm meet local demand.

The source said the local market should not be penalized for Global Steel’s inability to produce CRC and HRC.

Earlier, the Filipino Galvanizers Institute (FGI) said they will be holding off their planned five-10 percent increase in prices because should the Trade Department lower import duties, the impact of higher import prices on the cost of galvanized iron (GI) roofing sheets will be lessened. CRC is the material for the production of GI sheets while HRC is used to produce CRC.

The galvanizers said they will be increasing GI sheet prices to offset the higher cost of raw materials brought about by the continuing increases in the cost of iron ore and related products in the world market.

A five-percent increase in GI sheet prices was to take effect Saturday followed by another five- percent rise on June 1. The world’s three biggest mining companies – BHP Billiton Ltd., Rio Tinto of Australia and Ciavale of Brazil – have quoted higher prices for their iron ore supply.

As a result, prices for steel materials such as slabs, billets, wire rods, HRC and CRC have risen by $100-150 per metric ton compared to 2009 prices.