The ailing domestic stainless steel industry reeling under severe under- utilisation of capacity, has got the much needed impetus as finance minister Arun Jaitley proposed an increase in import duty on flat-rolled products from 5% to 7.5%, making Indian steel makers competitive in the backdrop of a sudden and immense surge in imports from various countries, especially China. However, on the raw material front, the finance minister increased the customs duty on imported metallurgical coal, which will have an adverse affect on the cost of production.
"For steel, it a double edged budget. Proposals and allocations show a clear path for increased steel demand. That is good news. The increased custom duties on imported metallurgical coal is rather surprising and disappointing, given the shortage of metallurgical coal, in our country," said Essar Steel executive vice chairman Firdose Vandrevala.
Echoing similar feelings, JSW Steel joint managing director and CEO Seshagiri Rao said, "In view of the current shortage of domestic coal for both steel and power sector, increase in basic customs duty for coking coal from nil to 2.5% and for steam and bituminous coal from 2% to 2.5% requires to be reconsidered."
India, the world's third largest steel producer and consumer, witnessed surge in imports of stainless steel to 307,226 tonnes in 2013-14 from 239,136 tonnes in 2011-12, reporting a growth of nearly 30%. N C Mathur, president, Indian Stainless Steel Development Association while welcoming the steps taken by FM to increase the custom duty on imported flat rolled stainless steel said, "Keeping in mind the condition of the domestic industry the government should have also reduced the duty on input raw materials like SS scrap, nickel both of which are not domestically available."
Taking opportunity of lower customs duties, imports were on the rise in recent times as China has an average customs duty of 10% and Brazil at 14%. Stainless steel consumption is India expected to grow at 9% per annum annually to reach around 3.5 million tonnes by 2015.
Industry fears that a potential rise in the cost of iron ore with proposed likely adverse changes in royalty payments on mining will further have adverse impact on the cost of production. However, the FM has added a little sweetener by the reduction of import duty on limestone and dolomite.
The investment linked deduction to slurry pipelines for the transportation of iron ore will boost investment in this sector and help the steel companies to set up slurry pipelines to reduce their transportation costs. Government's impetus on improving the infrastructure and housing sector across is likely to translate into giving a boost to the domestic stainless steel market.
Source: The Times Of India
- metaljunction »
- Metal News
Metal News & Events
METALJUNCTION PUBLICATIONS
Coal Insights (English) Monthly
![Steel Insights](/assets/images/news/coal-insights.jpg)
Coal Insights is a ready reckoner for anyone associated with coal. This publication is aimed at tracking everything related to coal in India.
India Coal Market Watch(English) Monthly
![Steel Insights](/assets/images/news/ICMW_Jan09.gif)
ICMW is a one-stop source for all news, data and research pertaining to coal demand, consumption, stocks, spot- and long-term prices with respect to the Indian Market.
India Steel Market Watch (English) Monthly
![Steel Insights](/assets/images/news/ISMW.gif)
ISMW is a brand new high-end steel market report, covering all aspects of the steel industry in India.
Steel Insights(English) Monthly
![Steel Insights](/assets/images/news/SteelInsights.jpg)
Steel Insights delves into various facets of the domestic and global steel industry such as market fundamentals, raw material price trends, price forecasts etc.