The Hindu Business Line : We’ll import as much as we export: Secondary steel makers

New Delhi, April 2 In order to help bridge the demand-supply gap in hot rolled (HR) steel to control runaway prices, the secondary steel manufacturers and exporters on Wednesday assured the Government that they would import an equivalent amount of steel that they export.

The move is aimed at increasing domestic availability of primary steel, which in turn is expected to bring down domestic prices.

This assurance came at a meeting between the Ministry of Steel and secondary steel producers here today.

There was strong persuasion by the Government, including hints, that it would be forced to impose a high ad-valorem export duty on secondary steel exports that uses domestically produced HR steel as raw material, sources present in the meeting told Business Line.

Briefing newspersons after the meeting, the Steel Secretary, Mr R.S. Pande, said, “to increase domestic availability of HR steel the secondary producers today said that they would be importing HR steel to the extent they export cold rolled (CR) and galvanised steel.”

“There is a demand-supply gap of around 2 million tonnes of primary steel in the domestic market and this move will increase domestic availability by around 0.6 million tonnes,” he said.

Currently, around 1.6 million tonnes (mt) of secondary steel is exported from India. Secondary manufacturers import around one mt and source another 0.6 mt from domestic HR manufacturers.

This sourcing from the domestic market is expected to be balanced through additional imports, and for this, the secondary manufacturers are expected to use the existing zero duty advance licence scheme available to them as exporters. Otherwise, steel imports for domestic use attracts 5 per cent duty.

According to the steel secretary, “The major steel producers have already assured that they will voluntarily restrain from exports. This move by the main producers will increase domestic availability by around one million tonnes. So, the net increase in domestic availability will go up by around 1.6 mt leaving a gap of approximately 0.4 mt.”

“On the price front, the secondary steel producers have said that they would follow transparent pricing policy and would publish price lists. They would come back to us on this,” he said, adding that ingot prices have already come down by around Rs 2,500-3,000 in the last few days.

The Executive Director of Cold Rolled Steel Manufacturers Association (Corsma), Mr S.C. Mathur, told Business Line after the meeting that “it has been decided that a representative group of all secondary steel manufacturers will meet Steel Ministry officials again next week to suggest ways that could enable reducing prices.

“Representatives of secondary manufacturers of long products, pig iron, sponge iron and re-rollers will again meet Ministry officials on the price issue on April 8,” he said.

In order to further persuade the industry to bridge the demand-supply gap, the Steel Ministry has called a meeting of primary steel manufacturers such as SAIL, Tisco, Essar, Ispat and Jindal on Thursday.

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