Financial Daily from THE HINDU group of publications
Monday, Feb 10, 2003
Financial Daily from THE HINDU group of publications Monday, Feb 10, 2003 |
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Steel Industry & Economy - Steel Steel producers, users heading for showdown Ambarish Mukherjee
NEW DELHI, Feb. 9 THE domestic steel industry is heading for a major show down arising out of the conflict of interest between the primary steel producers and its users, which include secondary steel producers and manufacturers of white goods and automobiles. The secondary steel producers, their associations and various white goods manufacturers, spearheaded by the Cold-Rolled Steel Manufacturers Association (Corsma), have joined hands to form a new body named Forum of Flat Steel Product Consumers (FFSPC). Corsma has sought the intervention of the Prime Minister's Office (PMO) to sort out matters. If things are not sorted out for the benefit of the end-users and consumers, and industrial production continues to suffer because of abnormal pricing of hot-rolled steel products, then there will be no options left but to approach the parliamentarians and various parliamentary bodies for a political solution, the Director of Corsma, Mr S.C. Mathur, told Business Line. The five primary steel producers in the country, namely Steel Authority of India (SAIL), Tata Iron and Steel, Jindal Vijaynagar Steel (JVSL), Essar Steel and Ispat Industries have increased the prices of their hot-rolled products by around 70 per cent during the past 10 months since April 2002. The increased price was sustained due to high export demand, particularly from China, which is importing approximately 30 million tonnes of steel this year for its construction activities aimed at the 2008 Olympics. Simultaneously, the domestic consumption figures for the April-December period, which have just been released by the Joint Plant Committee for the iron and steel industry, suggest that actual domestic consumption of steel during this period is substantially lower compared to the previous year, indicating major slowdown in industrial production. According to the data released by the committee, domestic steel consumption for the April-December period stood at 20.5 million tonnes, two million tonnes short of the targeted 22.5 million tonnes. Consumption of steel pipes and tubes at 3.56 lakh tonnes is 10 per cent less compared to the corresponding figures for 2001. Similarly the consumption of HR sheets and plates were down by 14 per cent and 12 per cent, respectively, compared to the previous years data. Under this situation, industry bodies like the Corsma, the All-India Cycle Manufacturers' Association (AICMA), the Federation of Industries of India, which represent the tubes and pipes makers and a large number of white goods makers, have joined hands to sort out the matters. While individual automobile companies and automobile component manufacturers have come forward and participated in the FFSPC, the two associations, namely Society for Indian Automobile Manufacturers (SIAM) and Automobile Component Manufacturers of India (ACMA) are not yet part of the forum. Individual companies which have joined the fight against price hike by the five big steel producers include, among others, Godrej Industries (steel furniture division), Bajaj Auto Ltd, Hero Honda, Polar Industry, GE Motors, Jay Bharat Maruti, Lucas TVS and Caparo Maruti, to name a few.
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