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Steel News May 05, 2016 08:30:20 AM

Rising imports induce troubling times to Indian steel industry

Anil Mathews
ScrapMonster Author
The domestic steel industry has been under stress for a long time now, mainly due to dumped imports from various sources.

Rising imports induce troubling times to Indian steel industry

NEW DELHI (Scrap Monster): The Ministry of Steel in India has stated that the domestic steel industry in the country has been badly impacted by the rising imports of steel products from other countries. Replying to a query in the Parliament, Steel Minister Narendra Singh Tomar stated that the government has taken several measures to safeguard the domestic steel sector in the country. He assured that necessary actions will be taken in the interest of country’s steel manufacturing sector in future as well.

Stressed sector

The domestic steel industry has been under stress for a long time now, mainly due to dumped imports from various sources. China-the major producer of steel has dumped steel products to global markets including India at a cheaper rate, thereby impacting the business and margins of domestic players. The prices of these dumped products are often lower than cost of production by domestic steelmakers. As a result, domestic players are forced to sell their goods at rates, lower than production cost, thereby leading to huge losses.

20% Safeguard duty

In a bid to provide relief to the ailing domestic steel sector in the country, Finance Minister Arun Jaitely announced 20% safeguard duty on imported steel during September last year. The duty, initially applicable for 200 days was applicable on import of hot-rolled flat products of non-alloy and other alloy steel with a width of 600 mm or above. Incidentally, HRC accounted for nearly one-fourth of the total steel imports during fiscal 2014-’15.

Minimum Import Price

The Directorate General of Foreign Trade (DGFT) under the Ministry of Commerce and Industry, on February 5th, had decided to impose a minimum import price ranging from $341-752 per tonne on 173 categories of steel products. The MIP was imposed for a period of six months initially. Meantime, the Ministry of Steel demanded that the MIP mechanism should be revised to include stainless steel products as well.

Pick up in crude steel output

The latest yearly report published by the World Steel Association states that India has become the world’s third largest producer of steel during 2015. The country’s crude steel production climbed higher by 2.6% over the previous year to 89.582 Mt in 2015. The cumulative crude steel output by the country during the first quarter of the current year has increased by 1.8% from 22.504 Mt in Q1 2015 to 22.913 in Q1 this year.

Infra growth to push steel demand

The country’s Steel Minister also noted that the country’s per capita consumption of total finished steel in 2014 stood at 59 kg compared to the world per-capita consumption of 217 kg. The developed countries have usually higher per capita consumption of steel when compared with developing countries, mainly on account of higher infrastructure and industrial spending. The government’s ongoing focus on infrastructure development in the country is likely to pick up steel demand.

The Minister claimed that the government has taken several steps to safeguard the domestic steel industry. He assured that necessary actions will be taken in future as well.

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