Steel prices should remain stable in the domestic market after cooling down and prices have hit the bottom in the global markets, Sajjan Jindal, chairman of JSW Group, said on Wednesday. Jindal expressed hope that the government would think about removing the export duty as steel prices globally have come down.
“Steel prices are now quite stable and we don’t see too much of fluctuations in steel prices. It should remain stable. Globally also I think it has come to a bottom level, where Chinese steel companies are losing money heavily and they cannot afford any more drop in steel prices. So, I think steel industry cannot afford to drop steel prices any more,” Jindal told reporters on the sidelines of an Indian Chamber of Commerce (ICC) event.
To rein in input prices and control runaway inflation, the Centre imposed an export duty of 15% on select pig iron, flat-rolled products of iron or non-alloyed steel, bars and rods and various flat-rolled products of stainless steel and another 45% on iron ore pellet. Similarly, the export duty on iron ores and concentrates was raised to 50% from 30%.
Jindal said right now steel exports from India have slowed down because of the export duty. And, as the steel prices have cooled down in the domestic market, now probably the government would open up the export again. “I think already the steel ministry has recommended that the duty should be removed now. There is really no need of export duty now because world prices have cooled and there wouldn’t be much export. But, I think the government is still thinking. Probably the export duty will be removed in a phased manner,” he said.
JSW Steel is currently exporting around 25% of the company’s total production capacity. And, Jindal said given the overall domestic and overseas conditions, exports will remain at around this level in the next three years.”The export duty is restraining exports. For example, we export to auto industry globally. So, now we are not able to export. Certainly, global auto industry is feeling that India is not a reliable partner as far as steel is concerned. So, these are some of the negative things. But, I think things will go away,” the JSW Group chairman said.
JSW Steel is planning to expand its production capacity to 50 million tonne by 2030 from the current 27 million tonne. It will be through greenfield and brownfield expansions. The company may also take inorganic route. JSW Group is likely to bid for state-run Rashtriya Ispat Nigam (RINL) and NMDC Iron and Steel Plant (Nagarnar) as and when they are divested. “No more steel companies are coming through IBC. Public sector disinvestment may happen. That could be the area,” Jindal added.