Steel imports up 25% in 2009-10.

Steel imports for the year 2009-10 have risen 25 per cent. This is according to the provisional figures released by the Joint Plant Committee. As compared to 5.839 million tonnes of steel imports in 2008-09, the figure shot up to 7.296 mt last year.

In the light of increased imports, the Steel Ministry is keeping a close watch on the situation. The Minister of State for Steel, Mr A. Sai Prathap, said in the Lok Sabhalast week, "The Government is carefully watching the trends in imports of steel into India and may apply suitable policy measures to mitigate the adverse consequences of any surge in steel imports, as and when required."

Earlier, the Government had slapped an anti-dumping duty of $2,254/tonne on import of certain stainless steel products - used by consumer durables and auto industries - from the US, the EU, China and other countries.

But despite the anti-dumping duty, domestic steel prices during the first quarter of this financial year were severely impacted because of the low-priced imports. Surging imports had pulled down domestic steel prices by around 12-15 per cent.

No respite from a stronger Yuan

The steel industry was hopeful that a marginally stronger yuan would bring down the competitiveness of Chinese imports coming into the country.

The Steel Authority of India Chairman, Mr C.S. Verma, told Business Line, "the slight floatation of the yuan is a positive indication on the domestic price front."

But, according to Mr Sai Prathap, it is the exchange rate between the dollar and the rupee that will play an important role in determining the competitiveness of Chinese exports to India.

Since May, the rupee has fallen by four per cent against the dollar. Commenting on the impact of lower-priced imports an industry official said, "increasing imports continue to be a problem on the price front. Flat-products prices would keep facing the price pressure from cheap imports. However, we are hopeful that domestic demand will help in firming up prices of long-products. By mid-August, construction activity should start again and we could see prices of long products increasing."

Imports mostly impact flat products used in automobiles, appliances and capital goods as only HR coils and stainless steel products are imported

Source : istockanalyst.com