Export duty gives a leg-up to local steel output
Steelmakers have decided to cut down exports significantly in the wake of 15% export duty imposed on hot-rolled coils (HRCs).
By Pramugdha Mamgain, TNN |
NEW DELHI: Steelmakers have decided to cut down exports significantly in the wake of 15% export duty imposed on hot-rolled coils (HRCs). While JSW Steel has decided not to export at all this fiscal, some others like Essar and Ispat are looking to reduce HRC exports by almost 50-60% this year. The increased availability of HRCs is expected to check steep price rise of steel in the domestic market, which has been putting pressure on inflation in the recent past.
"Our major focus this year would be to bridge the current domestic demand-supply mismatch. In order to increase domestic availability, we have decided to stop HRC exports. Moreover, since we haven���t signed any long term contracts with overseas buyers, it���s easier for us to call off exports," said JSW Steel director (finance) Sheshagiri Rao. JSW Steel���s total HRC production stood at 2.15 million tonnes during 2006-07, of which exports accounted for close to 5%. Last fiscal, the company���s total HRC production was 2.7 million tonnes, of which 6% was exported. This year, the company would shift focus to the domestic market.
Similarly, Ispat and Essar would continue to export HRCs to only those overseas buyers with whom they have long term contracts. All short term contracts would be called off. "We have no choice but to fulfil long term export commitments," an Ispat official said. Ispat���s exports stood at 14-15% of its total HRC production (3 million tonnes) last fiscal.
Exports were a much bigger proportion for Essar. The firm exported almost one-third of its total production of 3.37 million tonnes in 2007-08. Other steel majors such as Tata and SAIL have already reduced exports to a mere 1-2% of their total production. HRC is used for making cold rolled coils, which in turn are used by steel consuming industries like consumer durable and automobile sectors.
"Our major focus this year would be to bridge the current domestic demand-supply mismatch. In order to increase domestic availability, we have decided to stop HRC exports. Moreover, since we haven���t signed any long term contracts with overseas buyers, it���s easier for us to call off exports," said JSW Steel director (finance) Sheshagiri Rao. JSW Steel���s total HRC production stood at 2.15 million tonnes during 2006-07, of which exports accounted for close to 5%. Last fiscal, the company���s total HRC production was 2.7 million tonnes, of which 6% was exported. This year, the company would shift focus to the domestic market.
Similarly, Ispat and Essar would continue to export HRCs to only those overseas buyers with whom they have long term contracts. All short term contracts would be called off. "We have no choice but to fulfil long term export commitments," an Ispat official said. Ispat���s exports stood at 14-15% of its total HRC production (3 million tonnes) last fiscal.
Exports were a much bigger proportion for Essar. The firm exported almost one-third of its total production of 3.37 million tonnes in 2007-08. Other steel majors such as Tata and SAIL have already reduced exports to a mere 1-2% of their total production. HRC is used for making cold rolled coils, which in turn are used by steel consuming industries like consumer durable and automobile sectors.
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