Enough flat steel in local mkt: ISA

Indian Steel Alliance (ISA) said there is no shortage of flat steel in the domestic market, and has called for the resumption of DEPB benefits on steel exports.

Following is the text of the press release issued by ISA:

Indian Steel Alliance (ISA) today said that there is no shortage of flat steel in the domestic market. It added that the domestic flat industry has been producing a surplus of nearly 3.5-4 million tons of flat steel every year and 5-6 million tons of finished carbon steel, which cannot be absorbed by the domestic market.

ISA member companies augmented their production of HR Steel by 9% to 13.15 MT in 2003-04. Similarly, their domestic sales grew by 10% to 10.29 MT during the same period. ISA said the efforts would continue this year as well to meet all domestic demand.

Mr. Moosa Raza, President, ISA, said, "Whenever there has been an increase in the domestic demand for steel, ISA member companies have made sincere efforts to increase production and ensure adequate supplies. Given the current demand supply situation, it is very surprising to hear voices about steel shortage in the country."

ISA said it is worth observing that the high growth of 62% in steel exports during the fiscal 2002-03 tapered off to 2% during 2003-04. Major steel producers in India are facing slower or even negative growth in export sales after the DEPB suspension.

Mr. Raza added, "The steel industry undertakes exports mainly to offload the surplus production so that capacity can be optimally utilized. Even at the prevailing price levels, most major steel producers could not utilize their capacity beyond 90%. Although India is the 8th largest steel player in the world, its share in world steel exports is below 2%. Whereas China's share is more than 6% even though its domestic demand for steel is manifolds that of India. Export/production ratio in India is also low at 16.36% in comparison to the world average of 39.7%."

   

Demand-Supply Scenario of Finished Carbon Steel (In MT)
Year	Production*	Imports	Domestic Availability	Demand
02-03	33.67	1.51	35.18	28.89
J03-04E	36.19	1.65	37.84	30.31
*Out of this more than 2 million tons go as feed material

ISA said that neither is the supply of flat products by its member companies scarce, nor are their products consumed by small-scale industries in significant quantities. According to the information available with ISA availability of HR flat products is not the problem being faced by small-scale industries, foundries, re-rollers, and retail segments. This was evident from the fact that customers of steel products have been complaining about the availability of pig iron, coke, scrap, and some long products, which are not produced by ISA members in significant quantities.

ISA suggested that immediate restoration of DEPB benefits with retrospective effect would be required to keep the revival of the steel industry going. It also called for policy stability and a clear vision for the steel industry. It said the Government should find ways to reduce the cost of steel inputs and to reduce comparative disadvantage in cost of funding, power and freight. This would act as productive for both the industry and the economy.