Steel Cos Seek Protection from Cheap Imports

[msn1270]

one side, Domestic Steel Companies are rising steel prices month on month by reducing their output to the market.
On the other side, they hesitate to face the competition. Now they're lobbying to check the import of steel from other countries to safeguard their interest.

Poor end user is paying for their lobby.
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Under pressure of surplus domestic capacity, stainless steel makers in India are seeking economic protection from cheap imports. Steelmakers such as Jindal Stainless and Steel Authority of India (SAIL) claim that there has been a 30% rise in cheaper imports in recent months, particularly from China. Imports now account for 34% of the domestic stainless steel market and companies are demanding to raise import duty from current 5%.

According to N C Mathur, president of Indian Stainless Steel Development Association, of the 6.32 lakh tonne sold between the period from April to November 2012, about 2.16 lakh tonne came from imports. “Of India’s total steel production, stainless steel accounts for 4%, well above the global average of 2% (of stainless steel against total steel produced). We’ve worked hard to create demand, the government must consider doing something beyond a safeguard duty which is very specific,” Mathur said.

Unsure of a relief from this budget, an industry meeting in Mumbai is slated on Tuesday, where the participants hope the government will hike duty by the middle of next fiscal, as was done for carbon steel imports. “Against the current 3.7 million tonne capacity, domestic consumption is only around 2 million tonne. A stainless steel maker making profits is rare, even profit making alloy steelmakers are few. Cheap imports are really pinching us given our own domestic surplus capacity,” a senior official from Steel Authority of India said. Sail’s stainless unit at Salem, Tamil Nadu is running at a loss of around . 150 crore. Of its 3.8 lakh tonne capacity, it produced only1.2 lakh tonene of hot and cold rolled steel and sold a mere 0.84 lakh tonne. Similarly, Jindal Stainless is running its facility in Odisha at one-fourth its capacity. “Stainless steel production facility at Odisha is being ramped up. Slow growth in the sector is not encouraging us to ramp up at a quicker pace. In the last one year, global growth in Stainless Steel has been at 1.5% only due to subdued global economic conditions. This has led to increase dumping in India, especially from countries such as China, Malaysia and Japan,” says Ramesh Nair, President and Executive Director, Jindal Stainless Ltd.