Resource Digest - - NEWS -

As if the dam­age be­ing done by cheap Chi­nese steel im­ports was not enough, even Rus­sian steel is flood­ing the do­mes­tic mar­ket now, mak­ing pri­mary do­mes­tic pro­duc­ers in­cur cash losses worth Rs 3,000-4,000 per tonne, sources said.

De­pre­ci­at­ing Rus­sian cur­rency has al­lowed even the Rus­sian steel to come to In­dia, mak­ing it more dif­fi­cult for debt laden do­mes­tic pri­mary steel pro­duc­ers who are bat­tling with high lo­gis­tics and in­ter­est costs, they said.

Cur­rently, do­mes­ti­cally pro­duced hot-rolled coils are be­ing priced at Rs 24,000 per tonne.


• 2.5% im­port duty hike on long prod­ucts in June • 2.5% im­port duty hike on flat prod­ucts in Au­gust • Up to $316 per tonne anti-dump­ing duty on stain­less steel in

June • 50-57% anti-dump­ing duty on im­ports of cold-rolled flats

prod­ucts of stain­less steel in Dec • 20% safe­guard duty in Septem­ber on hot-rolled flat prod­ucts of non-al­loy and other al­loy steel with a width of 600 mm or above “Out of this, lo­gis­tics cost comes to about Rs 3,500 per tonne, while Rs 4,500-5,000 per tonne goes to­wards pay­ment of in­ter­est. While steel com­pa­nies are left with about Rs 16,000 per tonne in hand, their cost of pro­duc­tion is about Rs 19,00020,000 per tonne. So clearly, there is a min­i­mum cash loss of Rs 3,000-4,000 per tonne for th­ese com­pa­nies. If in­ter­est outgo is higher then loss could be wider on a per tonne ba­sis,” Mum­baibased trader Danesh Me­hta, who is also a mem­ber of Bom­bay Iron Mer­chants' As­so­ci­a­tion, said.

Price of im­ported hot-rolled coils on the other hand stands at about Rs 21,000 per tonne at present.

Sajjan Jin­dal-led JSW Steel, Tata Steel, state-owned Steel Au­thor­ity of In­dia, Jin­dal Steel & Power and Es­sar Steel are among the large steel pro­duc­ing com­pa­nies in the coun­try. Most com­pa­nies are un­able to com­ment due to the silent pe­riod ahead of third quar­ter earn­ings.

“Dump­ing of steel into the coun­try has pushed steel in­dus­try to a dead-end. Not only has it driven do­mes­tic steel prices to un-re­mu­ner­a­tive lev­els, this has also forced the in­dus­try to its lower ca­pac­ity util­i­sa­tion,” Shivramkr­ish­nan, chief com­mer­cial of­fi­cer of un­listed Es­sar Steel said. “The sharp drop in steel ex­ports due to pro­tec­tion mea­sures by var­i­ous coun­tries cou­pled with ris­ing steel im­ports at cheap and un­fair price lev­els into In­dia has cre­ated a glut in the mar­ket which is not in the long term in­ter­est of the na­tion in gen­eral, and the steel in­dus­try in par­tic­u­lar, since the in­dus­try has made an in­vest­ment of over Rs 4.5 lakh crore in cre­at­ing ca­pac­i­ties of 100 mil­lion tonnes. The govern­ment should im­me­di­ately take ap­pro­pri­ate mea­sures in this re­gard,” he added.

Last month, do­mes­tic steel prices had jumped by Rs 2,000 per tonne af­ter com­pa­nies stopped sell­ing in an­tic­i­pa­tion of the govern­ment's or­der to im­pose min­i­mum im­port price (MIP).

“Since the govern­ment has not acted on the MIP is­sue, steel prices have cor­rected by about Rs 2,000 per tonne in the last 10 days,” said an­other Mum­bai-based trader on con­di­tion of anonymity.

Newspapers in English

Newspapers from India

© PressReader. All rights reserved.