Financial Daily from THE HINDU group of publications
Thursday, Feb 12, 2004
Financial Daily from THE HINDU group of publications Thursday, Feb 12, 2004 |
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Industry & Economy
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Steel `Cut in DEPB rates won't affect steel exports' Our Bureau
New Delhi , Feb 11 THE new rates announced for the steel sector under the Duty Entitlement Pass Book (DEPB) scheme are unlikely to impact the market. According to industry sources, while the rates have been reduced for all types of steel products — hot rolled, cold rolled, galvanised steel as well as structurals, semis and wire rods, there will be no impact as the high ruling prices will more than offset the fall in DEPB rates. Had the cut in DEPB rates been to such an extent as to render the realisation from exports lower than that from domestic sales, there would have been a pressure on steel makers to sell more in the domestic market. But as of now, the realisation from exports of hot rolled steel and galvanised steel remains substantially higher compared to the domestic prices, and hence no impact on the demand-supply situation in the domestic market is forseen. For the other categories, the unit value realisation from exports and domestic sales continues to remain at more or less the same levels. Additionally, there are also possibilities of further price hikes over the next two months following increase in input costs, according to an official in a steel company. The largest exporters of hot rolled steel are the five primary steel producers — Steel Authority of India Ltd, Tata Steel, Essar, Ispat and Jindal Vijaynagar. However, the maximum margin is in the galvanised steel sector in which the beneficiaries include companies such as Bhusan Steel, National Steel, Jay Corporation, Uttam Steel, etc. However, for galvanised steel products, a ceiling price of Rs 25,500 has been fixed beyond which the difference between the sale price and ceiling price will not be considered for calculating the incentives.
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