The operating capacity of India’s stainless steel (SS) mills has declined to a low of 55 per cent, says the industry, due to cheap imports from China and other free trade agreement (FTA) countries, amid weak demand. The capacity utilisation was 65-70 per cent a year before.
Speaking on the sidelines of the announcement of Indinox 2015, a two-day SS industry event, scheduled to be held between January 24 and 27, 2015, at Gandhinagar, N C Mathur, president of the Indian Stainless Steel Development Association (ISSDA), said: “The SS mills have steadily invested $5 billion since its peak days of 2006-07, to create an overall installed capacity of around five million tonnes. Against that, we estimate a total production at 2.6-2.7 mt in 2014-15.”
This is because of dumping of Chinese goods into India, with some of these of substandard quality, he alleged.
Imports from China, Taiwan and Korea are estimated to have risen 150 per cent in about seven months. ISSDA says imports have gone up to around 40 per cent of annual consumption. In 2013-14, total import from all countries was 100,000 tonnes. However, says the body, imports from China alone have been 250,000 tonnes in the first half of the current financial year.
“The biggest problem Indian SS mills face is high electricity and logistics cost, unbearable rate of interest on working capital and continuous investment on pollution control equipment. Raw material exports from China attract a high duty of up to 40 per cent, to discourage shipment of inputs like SS scrap or ferro nickel. Over and above, the Chinese government is incentivising up to 13 per cent on export of SS, apart from low interest rates on working capital loans and cheap power. The industry will be protected only with a minimum differential duty of 7.5 per cent, which currently exists at five per cent,” said Hiten Bhalaria, managing director of Bhalaria Meal Craft, an SS utensil manufacturer and exporter.
Jindal Stainless has invested around Rs 12,000 crore in its 1-mt project in Odisha, currently at 30 per cent of its operating capacity. Its Hisar facility is currently operating at 60-70 per cent capacity.
“When Prime Minister Narendra Modi is emphasising on ‘Make in India’, here is an industry which is bleeding due to imports, despite having enough production capacity. We certainly need protection in terms of anti-dumping duty. The difference between raw material and finished product imports is currently five per cent in India as against 10 per cent in China,” said Mathur.
The industry also wants a relook at FTAs. The industry says import from countries with which we have signed such agreements are rising significantly, without any jump in our exports. India is the third largest global producer and second largest consumer of SS. The market for 2013-14 was at 2.5 mt, of which flat products accounted for about two mt. With a low per capita consumption of 2.1 kg (as against the world average of about five kg), there is a lot of potential for future growth. However, a slowing in the infrastructure sectors has been a major obstacle.\
Souce:hellenicshippingnews.com
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