After HRC, SAIL along with other steel majors, JSW and Essar Steel seeks safeguard duty on other steel products.
Steel Authority of India Limited (SAIL) in its recent conference call with investors on Indian steel industry and company performance in Q2 FY16 mentioned that company is hopeful that safeguard duty on other steel products may be imposed soon.
SAIL mentioned that the domestic steel industry demand grew by 4.1% Y-o-Y basis in Q2 whereas global steel prices have reduced by 46% over the last 18 months. India’s exports declined by 71% Y-o-Y basis and net sales realizations (NSR) of steel products declined by 21% Y-o-Y in Q2 FY16.
The safeguard duty which was announced in Sep’15 has not helped much in controlling price fall in domestic market as global HRC prices have fallen by USD 100/MT since safeguard duty inquiry was started. Thus SAIL has made a request to DGFT to impose minimum floor price (MFP) for imported steel. MFP is a minimum price beyond which steel cannot be imported to India from any country.
The company as a part of industry has also applied for safeguard duty on plates, wire rod and HR sheets due to increased imports of these products in Indian market. Company expects DG safeguards to complete their study by first week of Dec 2015.
Fall in Finished Steel Inventories, Rise in Semi Finished Inventories
Although finished steel inventory of SAIL declined by 55,000 tonne during quarter to 1.5 MnT, its semi-finished inventory increased by 7,00,000 MnT to 1.6 MnT during the same period. This is because shutdown in SAIL’s Bokaro plant which was planned for 45 days was prolonged to 75 days resulting in production loss of INR 55 crore.
Due to this influx of flat steel products (by SAIL) is likely in Indian market in coming months which is again going to pressurize the prices and inventory levels in domestic market.
Leave a Reply