Steel Makers Call For Anti-Dumping Measures
Domestic steel manufacturers have called for immediate and drastic anti-dumping measures to check steel dumping by Commonwealth of Independent States (CIS). They feared a failure to do so could put them in jeopardy in the coming financial year.
Warning that dumping had reached crisis proportions, particularly after the currency crash in the South-East Asian countries, the steel industry demanded for anti-dumping laws as in the United States.
Industry sources said the present anti-dumping laws were procedure-oriented rather than protectionist and hence, were ineffective in checking dumping which has started affecting the domestic industry.
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The falling fortunes of Steel Authority of India Ltd(SAIL) were a pointer to the difficult scenario, the sources said, adding that hot rolled (HR) and cold rolled (CR) steel producers have demanded a hike in import duty to check imports, particularly from the CIS.
They have demanded that existing duty on HR coils and sheets be increased from 25 per cent to 35 per cent and on HR plates and CR coils from 30 per cent and 25 per cent, respectively, to 40 per cent. Duty levels on HR and CR products have come down from 75 per cent to 25-30 per cent in the last six years.
The domestic availability of HR products during 1998-99 is estimated at 12.3 million tonnes. Against this, the estimated domestic demand was around nine million tonnes, resulting in a surplus of 3.3 million tonnes which could go up to 5.7 million tonnes by 2002.
The situation of CR products was also none too comfortable, with availability of 3.6 million tonnes against the domestic demand of 2.8 million tonnes.
With several new plants coming up, the total production capacity was expected to touch 30 million tonnes by the year 2000 and the share of HR coil was likely to be 15 million tonnes by the year 2010.
Apart from expansion of SAIL and Tisco, new capacities were being set up by the Jindals, Mukund and Ispat Industries.
There were indications that SAIL was contemplating a cut in HR coil output and recently, SAIL chairman Arvind Pande said the company was passing through a difficult phase. But, SAIL sources were tightlipped about their production plans.
Domestic producers have reported reduced profits in 1997-98 because of cheap imports of HR flat products, the sources said.
Pande has gone on record saying that SAIL had crossed the Rs 1000-crore mark in providing credit to buyers. But, market sources claimed the figure could be much higher.
Domestic producers complained they were in a disadvantageous position compared to overseas suppliers, particularly with respect to cost of finance, cost of critical inputs, power, coal, gas, infrastructure, inland transport cost and low cost credit lines.
The average cost of power in the world hovered around 4.2 cents per kwh, whereas in India, it was 7.5 cents per kwh.
Similarly, the international price of iron ore have gone up by five per cent only, whereas domestic prices increased by 58 per cent.
The prices of other inputs like gas and coal have also gone up disproportionately, the sources said, adding that 23 per cent of the domestic selling prices constituted statutory duties and transport costs.
All this made domestic steel more expensive than in other countries, the sources said.