Steel PSUs asked to curb exports

Move aimed at increasing availability of steel in the domestic market.

The steel ministry has asked public sector companies Steel Authority of India Ltd (SAIL) and Rashtriya Ispat Nigam Ltd to curtail exports.

"There has been a lot of hue and cry over shortage of steel in the country. This should ease the situation," a steel ministry official told Business Standard.

While Rashtriya Ispat does not sell much overseas, SAIL exports 20,000-25,000 tonnes of steel every month.

Confirming that the company will now go slow on exports, a senior SAIL executive said: "We are largely a domestic player. Our exports have never been more than 10 per cent of our total production."

In the past year, SAIL has been pushing exports aggressively, especially to China. The company had earlier said it would end the year with record exports.

Thanks to buoyant steel prices, the company expects to come out of the red by the end of the current financial year.

According to steel industry sources, though the curbs on exports may improve the availability of steel locally, this is unlikely to bring down prices given the unabated rise in raw material prices.

"Anyway, the integrated steel producers have agreed to hold prices till June," a source added.

Downstream users have complained to the government that steel producers are exporting large volumes of hot-rolled coil, though there is a shortage of over 1 million tonnes of the product in the domestic market.

Steel producers, however, said they sold an additional 1 million tonnes of hot-rolled coil in the local market last year.

Asked whether lower exports from SAIL would mean more overseas orders for other steel firms, the sources said SAIL's exports were not large enough to make a perceptible difference.

Earlier, PSUs had been advised not to export pig iron on account of its shortage in the country.

The decision to curtail steel exports by PSUs is the latest in a string of measures announced by the government in the last few days to check the rise in steel prices.

The government has reduced the import duty on prime steel, except alloy steel and stainless steel, from 20 per cent to 15 per cent; pig iron and sponge iron from 15 per cent to 10 per cent; metallurgical coke from 10 per cent to 5 per cent; non-coking coal from 15 per cent to 5 per cent; and coking coal from 5 per cent to zero.

On Friday, the government decided to cut the excise duty on steel from 16 per cent to 8 per cent and announced a subsidy of Rs 500 a tonne on steel bought by small-scale units and secondary users.

The impact

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• Domestic availability of steel to improve
• SAIL's turnover unlikely to be affected on account of buoyant local prices
• No significant boost to exports of other companies