Banking on government spending on infrastructure, a pick-up in investment in highways and construction and the good show by the auto sector, T V Narendran, managing director, Tata Steel India and South East Asia, is more positive on the steel industry this year. He said that Minimum Import Price (MIP) on steel should continue till
anti-dumping duties are imposed on imports, in an interview with Surya Sarathi Ray. Excerpts:
What is your outlook for the sector?
I am positive simply because the government is making a lot of investments. There is certainly a pick up in the highway building and construction sector. We are seeing auto sector doing better than before. If the mining sector opens up, mining equipment would do better too. Capital goods is not doing so well. With the implementation of pay commission, sale of appliances are likely to improve. Overall, I am more optimistic about the prospect of the steel industry this year.
Are you planning any price hike?
That will depend on how things unfold. Domestic price rise will depend on international prices. International prices have been very volatile. Steel price in China has gone up by $20 in the last two weeks; it dropped before that. So, we will watch and see. The steel price would also be determined by demand-supply dynamics.
Do you think, MIP should continue?
Yes, we certainly think that it should continue. Because at the end of the day, if you see steel companies, Tata Steel alone has invested R40,000 crore in the last five in capacity in India. If anybody wants to participate in the growth of India, he should come and invest in India and create jobs in India. We have no problem in facing competition. India is one of the countries which allow 100% ownership; anyone can set up steel plant with 100% capacity. You can’t do that in many other countries.
Again, international market is going through turmoil. World over, different countries are dealing with the subject, taking their own actions and India has also every right to take its action to protect the domestic industry.
Indian companies have raised the prices in recent times.
There is enough production capacity in India. And even in the last six months, when MIP was there, Hot rolled coil prices never went up to the MIP level. It was well below the MIP. In fact, international prices went above the MIP level. But Indian prices stayed below the MIP level.
Do you think that the price range under MIP should go up, if it continues?
No, I think whatever the level they determine is fine. I think that’s okay. MIP does stop people from selling steel in India at a loss. Before that most of the steel being sold in India were not at a competitive price. It also stops people selling steel in India below their domestic prices. When Indian exporters sell in the US at prices below the Indian domestic prices, we were slammed with the anti-dumping duty in the US. So, I think the government is looking at slapping anti-dumping duty and if the numbers justified, I am sure they will take action. MIP was seen as an interim measure till the time government decides on anti-dumping duty.
The JPC data shows imports are coming down.
But, still it is half a million tonne, which is not so less, this was the level before last year. I think 6-7 million tonnes imports is a very healthy level of imports.