03-05-2016

Indian Steel industry passing through severe downturn: Minister

Steel

Indian steel industry is currently passing through a severe downturn, Narendra Singh Tomar, Minister of Steel, informed the parliament today. Tomar cited downbeat global demand trends and overcapacity as the chief reason for the stress in the steel sector.

Globally, demand slowdown and overcapacity have resulted in major steel producing countries like China, Japan and Republic of Korea adopting predatory pricing strategy and dumping their products in India at prices often lower than their cost of production. Consequently, domestic producers have considerably reduced prices thus eroding their profit margin, the Minister said.

“For reducing the stress in steel sector, RBI has extended 5:25 scheme in July 2015, whereby longer amortization period for loans to projects in infrastructure and core industries sectors, say 25 years, based on the economic life or concession period of the project, with periodic re-financing, say every 5 years, is allowed,” Tomar said.

India imposed safeguard duty of 20% in March 2016 on hot-rolled flat products of non-alloy and other alloy steel, in coils of width of 600 mm or more. The government also imposed the Minimum Import Price (MIP) condition on 173 steel products. Imports of items covered under this notification will not be allowed into the country below the notified price.

Source: Commodity Online

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