Even as domestic steel consumption grew by 4.3% during the April-February period of the current financial year, production of domestic industry fell by 1.9% making it clear that imports, mostly at predatory prices, are eating into the shares of SAIL, Tata Steel and others in the domestic market.
Finished steel production fell during the 11-month period of the current financial year to 82.88 MT from 84.45 MT in the corresponding period of the previous financial year.
Fall in production has been reported by both integrated steel producers such as SAIL and Tata Steel by 0.8% and “other” producers such as JSW Steel, Essar Steel and JSPL by 3.3% at 42.35 MT and 47.73 MT, respectively.
“Compared to January 2016, overall production for sale in February 2016 (7.31 MT) decreased by 6.9% led by a decline in case of both the ISP producers (by 9.1%) and the other producers (by 7.4%),” Joint Plant Committee , a unit under the steel ministry said in its latest report.
Industry sources said that domestic firms were not utilising the full capacity in the face of rising imports at prices which were way below than the domestic cost of production.
In the first three quarters of the current fiscal, domestic firms’ profitability were under pressure with SAIL incurring a total loss of Rs 1,529 crore in the third quarter itself.
The domestic market continues to suffer from the rising imports, particularly from China, Japan and Korea, cost of production, affecting margins of steel producers in India.
The government has taken a series of trade remedial measures, including the latest by imposing minimum import price in the range between $341 and $752 on 173 products in February to contain the rising imports. Steelmakers have welcomed the move. However, JPC data showed that during the April-February period of the current financial year, imports went up by 20.5% to stand at 10.21 MT, crossing the 10 MT-mark for the first time. Imports have decreased by 0.1% compared to January, 2016 and by 7.3% compared to February last year.