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Local steel firms need to gear up

Mr Sabnavis predicates that much would depend on the government actually implementing its national steel policy target.

Mumbai: The strength of Indian steel industry will be tested after the two-month extension of anti-dumping duties (ADD) expires. ADD has given the steel industry a breather but it will have to gear itself to face competition in the normal course as this protection cannot be expected to last forever.

The government had earlier withdrawn the minimum import price it had imposed on cheap imports from China and South Korea. This brought down imports sharply by 37.4 per cent to 5.49 million tonnes during April-December 2016.

Though India has a strong case for imposing long-term anti-dumping duties on up to 124 steel products in the next two months, the long-term anti-dumping duties could be imposed on a case-by-case basis within the next two months according to Care chief economist Madan Sabnavis.

However “it cannot be expected that this protection will last forever and the industry has to gear itself to face competition in the normal course,” he cautions.
India’s production of steel in April December grew 8.8 per cent to 72.35 mt but consumption grew just 3.2 per cent at 73.75 mt. In 2014-15 production was 88.97 mt and increased to 89.79 mt the following year. This increase however is not in sync with the production capacity in the country.

According to CMIE’s CapEx database, large firms are expected to augment the sector’s production capacity by around 9.7 million tonnes in the last quarter of 2016-17.

( Source : Deccan Chronicle. )
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