The imposition of export duty on Indian steel companies has made overseas offerings uncompetitive, said Ranjan Dhar, Chief Marketing Officer, ArcelorMittal Nippon Steel (AM/NS) India. Calling the move a big blow, he said historical data suggests Indian mills “only turn to export markets once they have fulfilled the needs of the domestic market”.

Ever since the imposition of the duty, exports are far below the 15 per cent of total production range, a goal set by the National Steel Policy, which was brought in to encourage companies to build capacities for domestic use and exports. “Indian mills are losing valued clients to competing countries like China and others. Prices have also seen major corrections in the recent past. Immediate withdrawal of the duty can restore India’s image as a dependable source of high-quality steel,” he told BusinessLine.

There have been production cuts in China by more than 50 MTPA, and in other regions such as Ukraine and Russia. “Global demand was muted, but we expect it to come back now. We expect both restocking demand and consumption demand to provide a fillip to the industry,” Dhar said.

According to him, in the domestic market, steel prices have bottomed out and any further reduction is not viable for companies. The price of coking coal, a key raw material, has come down but are not decreasing further, keeping the cost of production high. Domestic demand “is strong and the outlook looks attractive” for the years to come, supported by various infrastructure initiatives, including rail (freight corridors), road (Bharatmala Pariyojana), aviation (UDAN scheme), gas pipeline, housing (Housing for All) and water infrastructure (Jal Jeevan).

“Buying activities are returning as the prices are getting settled at new levels and the market stock levels are low,” Dhar added.