Wed, Jan25, 2012
New Delhi: Industry body Assocham has called for raising the import duty on steel products from 5 per cent to a minimum of 10 per cent so that local manufacturers have a level playing field vis-a-vis imports from China and the Commonwealth of Independent States (CIS) countries.
The challenging global environment has resulted in fierce competition and increased pressure on performance and price reduction.
“The oversupply in international markets is forcing China and the Commonwealth of Independent States (CIS) to dump their steel products like hot-rolled coils... and other coated products into growing markets like India,” said the Assocham Secretary General, Mr D.S. Rawat.
As a result, the Indian steel industry has reduced its production and is running at lower capacity utilisation, he said.
China and CIS countries possess huge coking coal and iron ore resources, which give them cost-competitiveness, whereas India depends on imports for its requirement.
In the past one year, coking coal prices have increased by more than 100 per cent, putting an additional burden on steel manufacturers. Nearly 50 per cent of the steel manufacturing cost is on account of coking coal and 20 per cent on account of iron ore.
“Most importing nations protect their domestic producers by imposition of a marginally higher import duty while encouraging exports by offering various incentives,” Mr Rawat said.
Raising import duty to a minimum of 10 per cent will encourage the growth of the domestic steel industry and ensure that the India growth story is kept intact, he said in a pre-Budget memorandum to the ministries of finance and steel.
In the next two years, steel-making capacity is set to expand by 15-20 million tonnes to meet the growing demand for high-end consumer products like cars, fridges and washing machines.
Keywords: Assocham, steel products, import duty, China, CIS countries, imports, exports
(sourced Business Line)
Showing posts with label ASSOCHAM. Show all posts
Showing posts with label ASSOCHAM. Show all posts
Wednesday, January 25, 2012
Tuesday, October 4, 2011
ASSOCHAM against long-term iron ore export contracts by NMDC
Tuesday, 04 Oct 2011
ASSOCHAM has opposed the move of signing long-term export contract of iron ore with Japan and Korea by the National Mineral Development Corporation particularly in the context of current crisis.
In a representation to the central government, the chamber has stated that we should not be allocating the national resources for meeting the requirements of steel makers abroad without fulfilling the domestic requirements.
Mr D.S. Rawat secretary general of ASSOCHAM said that 40 million tonnes of iron ore production has already been reduced from the total iron ore production of the country subsequent to the orders of Supreme Court to ban the mining activity in Bellary, Chitradurga and Tumkur district in the State of Karnataka.
He further said “This has created acute shortage of iron ore and led to stoppage of almost all the sponge iron plant in Karnataka and neighboring state and most of the iron and steel plants are operating only at 30% to 50% capacity utilization and are on the verge of complete closure.”
ASSOCHAM has opposed the move of signing long-term export contract of iron ore with Japan and Korea by the National Mineral Development Corporation particularly in the context of current crisis.
In a representation to the central government, the chamber has stated that we should not be allocating the national resources for meeting the requirements of steel makers abroad without fulfilling the domestic requirements.
Mr D.S. Rawat secretary general of ASSOCHAM said that 40 million tonnes of iron ore production has already been reduced from the total iron ore production of the country subsequent to the orders of Supreme Court to ban the mining activity in Bellary, Chitradurga and Tumkur district in the State of Karnataka.
He further said “This has created acute shortage of iron ore and led to stoppage of almost all the sponge iron plant in Karnataka and neighboring state and most of the iron and steel plants are operating only at 30% to 50% capacity utilization and are on the verge of complete closure.”
Friday, May 20, 2011
Karnataka steel mills likely to face closure - ASSOCHAM
Friday, 20 May 2011
ASSOCHAM release said that major steel mills in Karnataka could soon be forced to close operations due to shortage of iron ore, threatening the livelihood of lakhs of families.
In a release, industry body the Associated Chambers of Commerce and Industry of India said that the impact of current crisis stemming from a blanket ban on iron ore mines in the Bellary Hospet region is likely to spread fast to smaller units and leave lakhs of workers jobless.
On May 6th 2011, the Supreme Court asked a team of officials to conduct a joint survey of mining lease areas mentioned in the Lokayukta report.
ASSOCHAM said that "If the joint team concludes that there has been illegal mining in encroached areas, then the lessee will immediately stop all mining operations in the entire demarcated area."
Mr DS Rawat secretary general of ASSOCHAM, in letters to Mr BS Yeddyurappa chief minister of Karnataka and Mr PV Jayakrishnan chairman of the Central Empowered Committee, said that "The Supreme Court has not given any direction to completely stop all mining activity in the district. In fact the apex court has asked to assess the encroachment in a scientific manner without effecting the current operations."
Mr Rawat said that but officials at the Department of Mining and Geology at Hospet have issued closure notices to all mines in the district, severely affecting the functioning of steel industry.
The mines in Karnataka supply iron ore to several large steel plants like JSW, Kirloskar Ferrous, Mukand and Kalyani Steels. The State also supplies raw material to dozens of small and medium sized sponge iron units located in Maharashtra, Gujarat, Andhra Pradesh and Tamil Nadu.
Steel, iron and other industries have invested close to about INR 70,000 crore in the landlocked Bellary Hospet region, which has abundant availability of iron ore.
Mr Rawat said that "The State finances will be adversely affected as these industries are paying to the tune of INR 8,000 crore a year in the form of excise duty, royalty and value added tax."
ASSOCHAM release said that mining should be moved from unorganized sector to the organized if it is to be done in a legal, scientific and environment friendly manner.
Karnataka accounts for 15 million tonnes of steel production representing 25% of the country's output. Keeping in view the huge investments, employment of lakhs of workers, social responsibilities and dependency of industries on iron ore, the chamber earnestly requested the CEC to ensure uninterrupted availability of iron ore lumps and fines to meet industrial requirement while complying with the Supreme Court order.
Sunday, February 6, 2011
ASSOCHAM calls for raising import duty on HR steel
Sunday, 06 Feb 2011
The Associated Chambers of Commerce and Industry of India in the interest of domestic steel Industry has stressed upon raising the import duty on hot rolled coils from prevalent 5% to minimum 10% to encourage the growth of domestic steel industry.ASSOCHAM feels that pro active policy measures adopted by Government of India can help expand the HR capacity by additional 8 million tonne during 2011-12, making India surplus for HR by more than 6 million tonne.In a proposal to the ministry of finance, ASSOCHAM has urged the government to raise import duty on HR minimum by 5%. It is imperative to mention that India used to be a net exporter of HR during the last decade but it has become a net importer since past 5 years and has already imported around 2 million tonne of HR Coils in the current financial year. China along with CIS accounts for almost 75% of total imports.ASSOCHAM has pointed out that excess capacity coupled with cost competitiveness are fundamental reasons for export of primary input raw materials for manufacturing steel ie iron ore, coking coal. Coking coal contributes approximately 50% of total cost while 20% cost is contributed by iron ore.Countries like China and CIS with excessive raw material resources are cost-competitive in the international market. China stimulates exports by giving an export incentive of 9% on HR Coils, on the contrary coking coal pries have increased by over 100% thereby, pressurizing cost-competence of Indian steel producers.ASSOCHAM has also outlined four fundamental factors that present adverse scenario for Indian steel companies producing HR Coils - excess capacities in China and CIS countries, cost competitiveness due to cheap source of raw material esp. coking coal, 9 %incentive given to Chinese exporters, new HR Coil capacities developing in India.
The Associated Chambers of Commerce and Industry of India in the interest of domestic steel Industry has stressed upon raising the import duty on hot rolled coils from prevalent 5% to minimum 10% to encourage the growth of domestic steel industry.ASSOCHAM feels that pro active policy measures adopted by Government of India can help expand the HR capacity by additional 8 million tonne during 2011-12, making India surplus for HR by more than 6 million tonne.In a proposal to the ministry of finance, ASSOCHAM has urged the government to raise import duty on HR minimum by 5%. It is imperative to mention that India used to be a net exporter of HR during the last decade but it has become a net importer since past 5 years and has already imported around 2 million tonne of HR Coils in the current financial year. China along with CIS accounts for almost 75% of total imports.ASSOCHAM has pointed out that excess capacity coupled with cost competitiveness are fundamental reasons for export of primary input raw materials for manufacturing steel ie iron ore, coking coal. Coking coal contributes approximately 50% of total cost while 20% cost is contributed by iron ore.Countries like China and CIS with excessive raw material resources are cost-competitive in the international market. China stimulates exports by giving an export incentive of 9% on HR Coils, on the contrary coking coal pries have increased by over 100% thereby, pressurizing cost-competence of Indian steel producers.ASSOCHAM has also outlined four fundamental factors that present adverse scenario for Indian steel companies producing HR Coils - excess capacities in China and CIS countries, cost competitiveness due to cheap source of raw material esp. coking coal, 9 %incentive given to Chinese exporters, new HR Coil capacities developing in India.
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