Steel prices may slip on more imports

May 14, 2009: At a time the US and European governments are busy trying to close their markets to foreign steel and imposing anti-dumping duties on steel products from India, there has been a sharp surge in steel imports.

This could push down prices, which have already suffered due to poor demand, according to industry officials. Most Indian companies had cut production late last year to counter the slowdown.

According to data from the Directorate General of Commercial Intelligence & Statistics -- part of the Commerce Ministry -- average monthly imports of steel in September were 80,000 tons, which went up to 250,000 tons in February following increased buying by galvanised steel players, engineering and construction companies.

Although imports are rising in most categories of steel, imports of hot rolled coils (HRC) -- the base grade category -- are also going up, despite being included in the restricted list last November. HRC is bought by cold rolled players, who make value-added products such as galvanised steel for use in construction and consumer goods.

"Earlier, steel was imported mainly in categories that India couldn't make," said a senior executive of a large private steel company. "Today, we can make all categories but imports are still happening as countries such as Russia and Ukraine are dumping their steel here."

Prices of steel have fallen sharply by more than 60 percent since September last, forcing many companies to reduce production to cut losses.

Companies that make primary steel include state-owned SAIL and private companies such as Tata Steel, Essar Steel, JSW Steel and Ispat Industries. Companies that import steel are mainly cold rolled players such as Indian Steel Corp, Bhushan Steel, Uttam Galva and Jindal Saw, carmakers such as Hyundai and engineering companies such as Larsen & Toubro.

Source: The Economic Times