Sops Under FPS For Steel Products Withdrawn

NEW DELHI: In a clear indication that primary steel exports may face a complete ban, the government on Friday withdrew export incentives under focus product scheme (FPS) available to certain steel products. The move comes close on the heels of the government withdrawing DEPB benefit on steel products in its bid to improve steel availability in the market and contain its rising prices.

Under FPS scheme the government aimed at giving a thrust to manufacture and export certain products including steel. However, the withdrawal of this benefit for the steel products would have a limited impact on the sector. It is expected that out of total steel exports of about 4-4.5 million tonnes, the withdrawal of the FPS incentive would impact only over 10% of exports.

“The measures (to make exports less attractive) in the FTP will not help in curbing inflation in the short term. Rather than supply constraints, there are other factors which add to inflation. The government should address major issues such as rising input prices for the steel sector. Only this can stabilise steel prices in the long run,” said Moosa Raza, president, Indian Steel Alliance.

Commerce secretary, G K Pillai, however, said that the measures were part of packages that are being worked out by the government to contain rising prices of steel. He said that export incentives have been withdrawn on steel products as these are not desirable for products that may be considered for an export ban. It is expected that CCP meeting next week may consider a complete ban of steel exports as part of large fiscal package aimed at softening inflation.

Steel Prices Slashed To Dent Inflation

NEW DELHI: THE country’s top steel producers, including Tata Steel, SAIL and Jindal Steel, on Thursday decided to roll back the prices of long steel products, including construction-grade TMT bars by Rs 2,000 per tonne. The price cuts would be implemented immediately.

The reduction in prices of long products is part of the package brokered by the steel ministry with main steel producers with the aim of providing relief to the common man by lowering prices of steel products directly used by him.

Accordingly, the steel companies have also agreed reduce the price of galvanised corrugated (GC) sheets use as roofing material for low-cost housing.

The steel companies have also agreed to address the issue of supply constraints resulting in higher prices of steel. The main steel producers would now import the requirement of intermediate products like hot-rolled (HR) coils under advance licensing scheme for producing high-grade steel and GPGC sheets, colour coated steel and cold-rolled (CR) coils.

“This is expected to unlock an additional two million tonnes of HR coils in the domestic market that would other wise have gone into producing high grade steel meant for exports,” steel secretary R S Pandey said after the meeting with steel producers. The meeting was attended by representatives from Tata Steel, SAIL, Jindal Steel & Power, JSW Steel, Essar Steel, Ispat Industries, RINL and Bhusan Steel.

The companies have agreed to increase allocation of steel for small-scale industries corporations by 20% from a level of 5 lakh tonne to 6 lakh tonnes. This would improve the availability of steel for the SME sector downstream industries.

Moreover, the companies have also agreed to bear a cost of Rs 400 on per tonne transportation of steel to this segment apart from Rs 500 per tonne subsidy available from funds of joint plant committee (JPC). Similarly, package has also been worked out for tiny units requiring one, two or three tonne of steel.

The steel ministry has also advised companies to go in for long-term contracts with consumers to prevent frequent price fluctuation from affecting industry.

“We are not rolling back prices of TMT bars. Its price has already softened and we are just matching the price through this cut,” Tata Steel chief operating officer H M Nerurkar said. The decision to roll back TMT prices by Rs 2000 per tonne would be implemented by Tata Steel and RINL as SAIL’s price in this category is already low. The three are main long product producers in the country.

“We will hold prices of long products despite rise in input cost as this category directly affects a common man,“ SAIL chairman S K Roongta said.

Ispat Industries managing director Vinod Mittal said the decisions would help people who were suffering the most in this period of price rise. “The package addresses the main issue of mismanagement that has resulted in high price of steel at least for small and medium sector.

Budget Wishlist: Excise Duty Drop On Steel

First came the price rollback and now India''s steel lobby wants the Finance Minister P Chidambaram to do his bit to bring down the price even more, a relief not just for the aam admi but also for the industry. The Union Steel Minister Ram Vilas Paswan has already flagged off the agenda seeking to halve the excise duty to 8 per cent but expectations don''t stop here.Tax cuts The steel minister proposes to reduce excise duty on steel to half from 8 per cent, export tax to be up on iron ore and Import duty on iron ore to be nil besides cut in import tax on coking coal to nil from 5 per cent.The steel lobby also wants hike tax on iron ore exports and a simultaneous cut in customs on ore imports. The industry is also demanding to coke coal imports duty free and cut in customs duty on other raw materials like zinc, nickle, LNG.

The iron ore exports should be banned. Declining profits The steel sector has seen many ups and downs in one year since the last budget. Looking at the ups, yes the steel prices have gone up but they have not been able to catch up with the raw material price hikes and this has squeezed the margins of the steel players but those feeling the heat the most are the smaller steel producers.