After slashing down the import duty on prime steel, pig iron, sponge iron and metallurgical coke; the government is now contemplating a series of steps to curtail export of steel as well as iron ore from the country.
Steel Minister Braja Kishore Tripathy told Business Standard that his ministry was evaluating the option of canalising the export of lower grade iron ore and commence negotiations with China for increasing the supply of metallurgical coke for Indian steel-makers.
Commerce department officials added that they were exploring the possibility of imposing a ceiling on export of iron ore from the country.
The country's steel producers have been advocating a restriction on iron ore exports in order to bargain for better metcoke prices from China.
In the last few months, metcoke prices have shot up from around $80 a tonne to over $400 a tonne. "We have reached a scenario where metcoke prices are higher than steel prices," an Indian Steel Alliance functionary said.
Tripathy is also likely to heed to the request of downstream steel companies to curtail export of the metal from the country. The minister did not rule out the possibility of imposing a surcharge on steel exporters in the near future. "If prices do not stabilise soon, we can impose a surcharge on steel exporters," he said.
Meanwhile, the commerce department has decided to freeze duty entitlement passbook scheme benefits for steel exporters in an effort to disincentives exports. A notification to this effect from the directorate general of foreign trade is expected.
Commerce and Industry Minister Arun Jaitley was involved in day-long parleys with his officials to work out ways to reduce exports and increase domestic supply of steel. Tripathy and Jaitley are likely to discuss the issue with Finance Minister Jaswant Singh over the next couple of days.
Tripathy said that while the finance ministry had reduced custom duties on some steel items from 20 per cent to 15 per cent, certain products were not covered and the matter would be taken up with the finance ministry.
The Cold Rolled Steel Manufacturers' Association has been saying that exports of hot-rolled steel are expected to overshoot the target for 2003-04, even though there is a shortage of over one million tonnes in the domestic market.
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