Lenders will meet members of the Indian Steel Association (ISA) on Friday over demands of a stricter safeguard duties on imports, sources told FE.
The meeting will be held at Indian Bank’s Association (IBA) office here and will be attended by all bank chiefs.
“Steelmakers want us to explain to the government the kind of cashflow problems they are facing owing to dumping from China, in turn affecting their capability to service debt,” a banker said.
According to sources, the likes of Arundhati Bhattacharya and chiefs of other major banks will be present at the meeting along with representatives from JSW Steel, Bhushan Steel, Essar Steel among others.
A banker said that while the steelmakers want an increase in import duty, the lobby of car makers are against it and are trying to push their demand for cheaper steel to be used in automobiles.
“One must understand that it is the large steel companies which are unable to repay debt and are heavily stressed, not the car makers,” he added.
Although the government had announced 20% provisional safeguard duty on certain categories of steel, including hot-rolled flat products last year, steel companies have been seeking more of such curbs.
The Indian steel industry has been reeling under the headwinds of multi-year low global prices, sluggish demand environment, accompanied by onslaught of Chinese imports.
JPMorgan analysts said in a recent report that CY15 was among the worst years for the Indian steel industry as both local and global problems converged with the situation so bad that most of the steel industry made losses even at the EBITDA level.
“Investors exited the sector, which led to asset valuations dropping to multi-year lows,” the report said.