Dumping, predatory pricing to blame for downturn in industry: Steel Minister

The Indian steel industry is currently passing through a severe downturn due to the dumping of products and predatory pricing of global steel players with excess capacity, said Chaudhary Birender Singh, Minister of Steel on Monday in a response to a question raised in Lok Sabha.

He however added that the government has taken various corrective steps to address the problems faced by the domestic steel sector and to provide level playing field to the domestic steel producers.

This includes, the government imposed Minimum Import Price (MIP) on 173 steel products in February 2015, an Anti-Dumping Duty was levied for five years on imports of certain variety of hot-rolled flat products of stainless steel in June 2015, a provisional safeguard duty of 20% was imposed on certain hot-rolled flat steel products in September 2015 and hike in import duty on various finished and semi-finished steel products.

The problems plaguing players such as SAIL and Rashtriya Ispat Ltd (RINL) is the unprecedented increase in imports of steel by 75% and 27% during 2014-15 and 2015-16, respectively over the corresponding period. This resulted in a sharp decline in domestic steel prices.

“Declining prices have led to lower sales realisation for domestic steel producers, including SAIL. The fall in prices have led to cash deficit in the company, which is being met by SAIL by way of borrowings from banks and debt market,” said Singh.

He further added that SAIL has undertaken modernisation and expansion of its steel plants at an indicative cost of Rs 61,870 crore. All major facilities under modernisation and expansion plan except Bhilai Steel Plant have been completed and are under stabilisation.

While the production steel by SAIL and RINL has not been reaching the target, the percentage share of SAIL in the total demand has been declining over the last three years. In 2015-16 it stood at 13.9% from 14.8% in 2013-14.

The questions were raised by Dr Swami Sakshiji Maharaj, BJP MP and Naranbhai Kachhadiya, BJP MP in the Lok Sabha session on Monday on the current steel production levels and the problems being faced SAIL and domestic players in the industry.