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Public-sector steel manufacturing industries affected by low demand and falling prices

Capital Market 

The public-sector steel manufacturing industries under Limited (SAIL) and RashtriyaIspat Nigam (RINL) are affected by factors like slow growth in steel demand, falling prices because global steel glut leading to import of steel at very low prices resulting in surge in steel imports during 2014-15 and 2015-16. The Government of India took various steps to support the domestic steel sector, some of which are as given below: i. Increase in peak rate of Custom Duty on steel to 15%. Effective rate of import duty was increased in phases to 10% on Long products and 12.5% on Flat products from pre-revised level of 5% and 7.5% respectively. ii. Against a petition by the domestic steel producers, Safeguard duty on HR Coils of 20% notified in September, 2015 provisionally and final notification issued for the same in March, 2016 extending 20% Safeguard duty up to September, 2016.

Thereafter, phased reduction to 18% (till March, 2017), 15% (till September, 2017) and 10% by March, 2018. iii. The Government of India notified Minimum Import Price (MIP) on select steel products (5th February, 2016) and further extended it on certain steel products for two months with effect from 5th August, 2016 and again for two months with effect from 5th October, 2016. iv. Provisional Anti-dumping duty notified on import of flat products (Hot Rolled & Cold Rolled) and on Wire Rods from China, Japan, Korea, Russia, Brazil, Indonesia & Ukraine vide notifications dated 8th August, 2016, 17th August, 2016 and 2nd November, 2016. v. Government amended the Steel and Steel Products (Quality Control) Order, 2012 from time to time to ensure that only quality steel is imported into India. The plant-wise Profit (+)/ Loss (-) of SAIL is given as under:- (Rs. in crore) Plant/ Unit 2013-14 2014-15 2015-16Bhilai Steel Plant (BSP) 2085 2232 405Durgapur Steel Plant (DSP) 416 506 -527Rourkela Steel Plant (RSP) 212 232 -2524Bokaro Steel Plant (BSL) 202 451 -2203IISCO Steel Plant (ISP) -653 -1072 -1939Alloy Steel Plant (ASP) -93 -134 -83Salem Steel Plant (SSP) -376 -355 -466Visvesvarya Iron Steel Plant (VISL) -123 -97 -116SAIL Refractory Unit (SRU) 3 7 21Chandrapur Ferro Plant (CFP) -78 -45 -78Raw Material Division (RMD)/ Central Units 1628 634 310SAIL Profit (+)/ Loss (-) Before Tax 3225 2359 -7198Tax 608 266 3061SAIL Profit (+)/ Loss (-) After Tax 2616 2093 -4137

RINL is a single unit steel producing CPSE. The Profit (+)/ Loss (-) of RINL is given as under:

( crore)

Particulars 2013-14 2014-15 2015-16Profit After Tax (PAT) 366 62 (-) 1421

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(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Wed, November 30 2016. 15:39 IST