The step should lift the sagging spirits of steel producers, struggling to cope with a downslide in steel prices at home and the rush of inexpensive steel from overseas. The cut-off rate for imports, is a permanent solution to check dumping and spares industry the rigmarole of an anti-dumping petition.

The seven products that attract a floor price for imports are hot rolled coils, cold rolled coils, tinplate, hot rolled sheets, electrical sheets, plates and alloy steel bars and rods (when hot rolled in coils). The bar on dumping of inexpensive steel, comes close on the heels of a similar restriction imposed on steel seconds, defective and wastes of the same products last week.

In quick succession, the Director General of Foreign Trade (DGFT) first notified a floor price for second-grade material on Thursday, following it up with asimilar notification on prime steel. The cut-off price of prime products are based on the rates of Japanese and European steel, as listed in the London Metal Bulletin.

The cheap flat steels against which steel majors at home were planning an anti-dumping petition, incidentally, come mostly from Southeast Asia, particularly South Korea, the CIS countries and South Africa. Of late Japanese steel has also begun to compete with Indian products on their home terrain.

Hot rolled coils (tin mill quality) imports will be blocked for instance, if priced below $ 302 per tonne c.i.f. (cost in freight). Seconds of the same product face an import bar if priced at less than $ 232 a tonne c.i.f. Hot rolled sheets imports will be allowed at a price of $ 317 a tonne or more, while defectives can be imported, if priced above $ 243 a tonne c.i.f.

All the seven steel products, both primes and defectives, are at present on the open general licence (OGL). Cold rolled coils have a cut-off import price of $ 392 a tonne c.i.f,while defectives face an entry barrier if priced below $ 299 a tonne c.i.f.

Tinplates can be imported at a price of $ 720 a tonne or more, while tinplate waste can come into the country if priced higher than $ 545 a tonne. The floor price for importing prime grades of electrical sheets (CRNO) is $ 763 a tonne c.i.f, while defective products can be imported at $ 577 a tonne or more. Prime grades of steel plates face an entry barrier, if priced at less than $ 409 a tonne. The floor price for defective plates is $ 311 a tonne. Alloy steel bars and rods (if hot rolled in coils) face a restriction if priced at less than $ 740 a tonne. Scrap and seconds of the same material have to be priced at $ 560 a tonne or more.

Incidentally, steel imports have been on the decline this year, after increasing rapidly every year since the phased cut-back in customs duties began in 1991. The total steel imports between April and May this year, was 1.57 lakh tonne, compared to 2.67 lakh tonne in the first month of the 1997-98fiscal.

Industry sources point out that the ``real damage'' to the domestic market was not in the quantity of imports, but in the prices at which steel was pouring in. Hot rolled coils comprise half the steel imports every year, followed by cold rolled coils, the prices of which have only moved downhill in the last two years.