While domestic demand will fall by 33.2 per cent at 25.477 million tonnes, exports will increase by 45.6 per cent to 15.085 million tonnes. Imports of steel into Korea will fall by 60.1 per cent to a mere 1.507 million tonnes.

Total production of steel will decline by 12.7 per cent to 39.055 million tonnes. Despite adverse market conditions, POSCO of South Korea produced 13.2 million tonnes of crude steel during the first half of 1998--an increase of around 0.2 million tonnes, compared with corresponding period last year.

It is expected to produce less during the second half of the year but total production would be around 25 million tonnes, which is more than the total Indian production.Tokyo Steel, the big mini mill of Japan, wants to step up its exports of flat productsfrom 510,000 tonnes of 1997 to 640,000 tonnes during 1998. Similar pressure in export is there on others. CIS countries are continuing their excess production of steel.

Prices of HRC of CIS origin are said to be around $220 to $230 FOB Black Sea Ports. Conditions are getting worse in the market. Turkey is likely to impose dumping duties on flat products to the extent of 20 per cent. EU is threatening to impose dumping duties on Turkish exports of steel to Europe.

Even China has started dumping duty enquiries on CIS Steel. There is no corner on earth which is not talking of dumping duties which bodes ill for world trade.Meanwhile, prices of carbon melting scrap and heavy melting scrap have crashed in the world market, but India seems to be virtually out of the market. The steep depreciation of the rupee and the four per cent additional import duty is discouraging importers who are using HBI/DRI in place of imported scrap.

MSTC is likely to be in the market for about 20,000 tonnes of shredded scrap.Turkey reportedly bought some quantity of shredded scrap at a low price of $112.50 FOB Europe and CIS is offering some lower grade of scrap at around $105 C&F European port. The price of HMS 1 said to be down to $ 117 CIF South Korea. Ever since liberalisation Indian scrap imports have fallen as the arc furnace units which were the main importers are no longer viable and most have closed down.

Indian scenario: With competition in stainless steel getting keen in the world and domestic market, Jindal Strips Limited, the largest integrated producer of stainless steel in the country, is restructuring itself. The company's operations will constitute stainless steel at Hissar and ferro chrome at Vizag. Thus, it will turn itself into a core producer of all varieties of Stainless Steel.

It will also get active in exports of stainless steel and ferro chrome and double the exports of both during the coming year. It will hive off its mild steel cold rolling operations situated at its Vasind unit to JindalIron and Steel.It will also hive off its sponge iron and machinery units situated at Raigarh and Raipur respectively to a separate company under the name of Jindal Power and Steel Company, who will concentrate on power and sponge iron.Jindal Strips has increased its stainless steel melting capacity at Hissar from 100,000 tpa to 250,00 tpa under the recent modernisation and expansion project which is now complete.

In 1997-98 it produced 176,000 tonnes of stainless steel from its two electric arc furnaces has a target to achieve a production of 210,000 tonnes in 1998-99. Of the above production, 200 series constitute about 80 per cent of the production and balance is 300 series and razor blade grade. Jindal plans to change the product mix and in about two years, 2000 series and other grades would be in the ratio of 50:50. The hot rolling capacity at Hissar matches the steel melt shop capacity of 250,000 tonnes.

In 1998-99 Jindal proposes to cold roll about 20,000 tonnes of the stainless steel. It has nowplans to expand its cold rolling capacity at Hissar by 70,000 tpa. A cold rolling mill procured from BHP of Australia will be installed and will be commissioned in two phases by December 31, 1999. The project is being appraised by IFCI at a cost of around Rs 325 crore to be funded by debt of 70 per cent and 30 per cent from internal accruals.

Jindal is nearly self sufficient in power with its own captive unit. With nearly 40,000 tpy of ferro chrome capacity being captive Jindal has to import only nickel to produce the required stainless steel.