The steel ministry has formed a task force to look into the macro policies affecting the steel industry. The panel comprises representatives from the steel industry, banks and financial institutions.
The first meeting of the committee was held in the third week of January. The committee has been set up to look into the problems facing major steel producers and projects. It will also look into the current context of the slump in steel prices and the fall in demand, both locally and overseas.
The committee will suggest policy measures required by the government in the context of the recent ban on steel imports by the US. This panel will have to give specific suggestions on what could be done to prop up the domestic steel industry. Commercial banks and institutions have an exposure to the steel sector of around Rs 40,000 crore. Of this, around 10 per cent (Rs 4,000 crore) have become non performing assets, said sources.
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The total investments in the steel industry is at more than Rs 65,000 crore. The committee has also asked individual companies to send a detailed list of suggestions for financial restructuring that is required by the companies.
The prices of hot rolled (HR) steel are also almost ruling at 20 year low level at around the $180 mark and steel analysts expect a revival in prices only by the second quarter of fiscal 2002.
In recent times, HR coils were being imported as seconds and defective materials from Russia and China thus pulling down the prices.
Also other than US, Europe, Indonesia, Canada and Thailand has levied anti-dumping duties on HR rolled steel from India.
US has protected its industry through imposition of dumping and countervailing duties and also through financial support in the form of tax cuts and lower industry rates, says sources.
In order to protect the industry, the committee may suggest measures such as ban on imports or similar stronger measures.