In a meeting with the representatives of Metal Can Manufacturers Association (MCMA) on Thursday, the ministry discussed the problems related to can manufacturing in light of the new floor prices on imports, release from the association said on Thursday.

Highlighting MCMA's discussion with the ministry, Vijay Bhatia, Chairman of Hindustan Tins said the association had urged the ministry not to include tinplate as part of steel sector as the end use of tinplate is for the packaging industry.

The association as an alternative to the impasse urged the ministry to fix floor price on prime tinplate imports only for customs duty purpose.

The DGFT in its December 1998 notification, fixed the floor price on the imports of various steel products, including tinplate. The floor price fixed fortinplate imports was $720 for prime tinplate and $545 for tinplate waste/waste (secondary) which were much above the global prices. Besides this was at a time when there is a recessionary trend in world steel markets.

The average tinplate prices have been declining since January 1998. The prices during January 1998 and March 1998 which were $730 for tinplate prime and $580 for tinplate waste/waste have now declined to $580 and $350-400 in last three months, respectively

As a result of this notification, the supply of tinplate has already dried up. On the other hand, domestic suppliers have jacked up their prices by over Rs 2,500 per tonne despite the inability to supply products to match the demand, claimed DD Binani, managing director of Anupam Products.

According to OP Agarwal, spokesperson of MCMA, the DGFT notification effectively puts a ban on imports of tinplate when domestic manufacturers, Tinplate Company of India Ltd (TCIL) and the Steel Authority of India Ltd (SAIL), cannot meet therequirements of the domestic tinplate user industry.

"We strongly feel that the notification should not be aimed at protecting the incompetetive domestic manufacturers at the cost of users and consumers", he added.

According to MCMA, the government's directive vide its notification no.57 (RE-93) 1997-2002 dated 10th December 1998, and No.35 (RE-98) 1997-2002 dated 11th Decmber 98 is the root cause of the crisis faced by the industry.

The notifications, though meant to provide a succour to the Indian steel industry has also inadvertently brought in tinplate under its purview. The usage pattern of tinplate indicates that it is essentially a raw material used for the packaging and should not form a part of the steel industry. Tinplate is primarily used for manufacturing metal containers for packaging puposes used mostly by the food processing industry.

Moreover as against the total requirement of 300,000 metric tonnes, domestic availability is hardly 100,000 metric tonnes.

Only two companies in thecountry manufacture tinplate- Steel Authority of India Ltd. and Tinplate company of India Ltd. While SAIL normally supplies tinplate used for manufacturing 15 kilogram containers, TCIL does supply for lower quantity containers but the quality do not match the required specifications.

MCMA had in a letter to the commece minister requested withdrawal of this hampering notifications. It has said in the letter that this notifications would sound a death knoll for the Rs 1500 crore metal can industry employing 1,00,000 people and contributing Rs 375 crore to the goverment exchequer.