Primary and secondary steel producers have urged the government to raise the import duty on ships brought in by the shipbreaking industry to 25 per cent, at a par with semis. The shipbreaking industry currently imports ships at a five per cent duty.
Domestic steel companies, those in the secondary sector in particular, which want a level playing field with the shipbreaking units, allege that because of the low import duty on ships, shipbreakers are able to make low cost conversions into re-rollables, which outprice the semis and are then marketed by the domestic steel companies.
During 1998-99, production of semis has declined by 4.69 lakh tonne as compared to the previous year and due to the closing down of many electric arc furnaces, the decline has been substantial in the secondary sector. This sector alone has registered a reduction of 3.75 lakh tonne, according to estimates of the Joint Plant Committee.
In the case of main producers, Steel Authority of India Ltd ended the year with increased inventories of semis of 21.60 lakh tonne, while Tata Steel closed the year with a reduced production of 8.35 lakh tonne. On the other hand, during the same period, the total tonnage of ships broken was over 33 lakh tonne, as compared to about 28 lakh tonne in the previous year. The major output of the shipbreaking industry is re-rollable scrap. Out of the to