Worst-ever crisis looms over steel industry: SWFI leader

Central government urged to initiate corrective steps to improve situation

:P.K. Das, general secretary of Steel Workers' Federation of India, addressing a meeting in Visakhapatnam on Sunday.

With China turning into net exporter of steel, the Central government must introduce heavy anti-dumping duties to safeguard the interest of the domestic steel industry, Steel Workers’ Federation of India (SWFI) general secretary P.K. Das said on Sunday.

Cheap import

Mr. Das, who was here to attend the two-day annual conference of Steel Plant Employees’ Union, told The Hindu that as the threat of cheap import eating into Indian market was looming large, it was high time for the powers-that-be to initiate policy changes to prevent a severe crisis.

He said the Indian steel industry, already hit by recession, would face a worst-ever crisis unless the government initiates corrective measures like slapping steep anti-dumping duties, imposing a ban on iron ore exports and reducing taxes like Customs Duty and Central Excise to reduce production cost of domestic manufacturers.

“China has a production capacity of 820 million ton. The production level is now maintained at 680 to 760 million ton whereas India’s steel production capacity is around 90 million tonne. China used to be a net importer till two years ago. As China is also experiencing fall in demand for steel due to saturation in urban infrastructure, it has decided to shift its focus to people-related investments such as rural sector and lifestyle change,” he said. Mr. Das, who is the secretary of Trade Union International Metal & Mining, said apart from China, South Korea, which used to export its surplus steel to China, was now looking at alternative markets like India.

Stating that the production cost of Steel Authority of India Ltd and Rashtriya Ispat Nigam Limited was very high as they were dependent on iron ore from National Mineral Development Corporation, the government should initiate allotment of captive mines to give them immunity from shrinking profit margins.

As the private lobby was very strong and it could do what public sector industries could not do, the government was also encouraging disinvestment of public sector units like RINL and SAIL, he regretted. To a question, Mr. Das said this was probably the main reason for lack of raw material security for public sector steel producers.

He said there was an urgent need to raise per capita consumption of steel in India as it was in the range of 42 to 44 kg against world average consumption of 230 kg.