Steel firms seek lower duty

With the impending change in guard at the Centre, downstream steel companies are hopeful that the new government will offer them some relief in the form of lower import duties. 
 
"There is a shortage of 1.3 million tonnes of hot-rolled coils in the country, according to the government's statistics. At the same time, Indian hot-rolled coil prices are $100 per tonne more than that in the United States, the European Union or China," SC Mathur, president of the Cold-rolled Steel Manufactures' Association, told Business Standard. 
 
For almost a year now, downstream steel companies, especially cold-rolled steel makers and integrated steel producers, have been at loggerheads with hot-rolled steel makers over the prices of steel. 
 
While cold-rollers have alleged that hot-rolled steel producers have been diverting exporting their produce in order to ramp up prices in India, the latter have argued that the prices had to be raised on account of rising input costs. 
 
The National Democratic Alliance government had responded in February by reducing the customs duty on hot-rolled steel from 20 per cent to 15 per cent, while the country's leading hot-rolled

steel producers, represented by the Indian Steel Alliance, had agreed to hold their prices till June. 
 
However, the Indian Steel Alliance has opposed any further cut in the customs duty rate. "We have taken up the matter with the steel and finance ministries," Indian Steel Alliance President Moosa Raza said, adding, "Any cut in duty at this stage will push the steel industry once again into the bad cycle. No country can afford to leave a strategic industry like steel with no protection." 
 
However, several downstream steel companies said they were hopeful that the Congress-Left alliance would try to curb rising steel prices in order to present a consumer-friendly picture to the nation. 
 
"This government cannot afford to let steel prices rise the way it happened in the last financial year," a leading north India-based pipe producer said. 
 
It is worth noting that hot-rolled steel producers are set to review their prices in June once the self-imposed three-month freeze in prices gets over. 
 
When asked if ISA could revise its prices earlier than that as the commitment was given to the NDA government, Raza said that ISA members will review the prices in June.