Indian steel majors on weak footing

New Delhi, Aug 2 | Updated: Aug 3 2005, 05:30am hrs
The Indian Steel Alliance (ISA), comprising steel majors like SAIL and Essar have been demanding a hike in import duty on steel from 5% to 10% on the grounds that there has been a sharp increase in steel imports. Both the finance and steel ministries have spurned the demand. The customs duty on steel stood at 30% just one and half years ago.

Moosa Raza, president, ISA, said, The actual rise in imports is much more than what the JPC has estimated. In some product categories, the surge was as high as 108%. However, when contacted, Tata Steel MD, B Muthuraman said imports had not been a major issue for the company. I have not analysed the JPC data to comment on them, he said.

According to Mr Raza, it was disconcerting that China is holding a huge inventory of 40 mt. He said Chinese steel could now enter the Indian market, precipitating a devastating price depression.

Countering this, SC Mathur, executive director of the Cold Rolled Steel Manufacturers Association, said Q1 results of major steel companies bear testimony to their robust profitability. Pre-tax profit of SAIL was 41% higher, while Essar Steel posted a 300% profit hike.