CORSMA Urges PMO Intervention to Curb HR Price Surge in India

Cold Rolled Steel Manufacturers Association of India has urged Prime Minister’s Office to revert import duty on HR Coil back to 5% and temporary ban or
CORSMA Urges PMO Intervention to Curb HR Price Surge in India
HR PriceTung Feng Steel

Cold Rolled Steel Manufacturers Association of India has urged Prime Minister’s Office to revert import duty on HR Coil back to 5% and temporary ban or imposing export duty on HR Coil for the period of six months only. CORSMA Executive Director Mr NK Sood wrote to Prime Minister’s Principal Secretary Dr Pramod Kumar Misra “The primary producers have abnormally hiked the HR Coil prices to the extent of 52% during the period July 2020 to date from the level of INR 36,500 to INR 55-56000 per tonne in spite of fact that the most of them have their own iron ore captive mines and are not affected by the global prices. As such, the increase in the domestic iron ore prices does not warrant the abnormal increase in steel prices. On the other hand, Coking coal prices have come down from the level of 115-116 USD PMT FOB Australia to 95-96 USD PMT FOB Australia on date (January 2021). The price of HR Coil is considered as the bench mark price for determining the price of all the downstream flat rolled and tubular products and as such the consequent steel demand from manufacturing sector. The viability of infrastructure sector is largely based on the price of HR Coil.”

He wrote “HR Coil is being produced by only 4-5 major producers and thus through cartel have the advantage of fixing prices of HR Coil owing to oligopolistic market and no competition from imports owing to number of protection measures like DMI & SP policy giving preference to domestically manufactured steel products, non-tariff measures like introduction of quality control order apart from the policy on steel import monitoring system.”

He wrote “It is observed that the primary producers are working towards profiteering as JSW Steel’s Profit Before Tax in July-September 2020 quarter surged by 264% YoY & 2005% to 2505 crores as compared to pre pandemic January-March 2020 quarter, Tata Steel’s Profit Before Tax in July-September 2020 quarter surged by 405% YoY & 221% to 2278 crores as compared to pre pandemic January-March 2020 quarter and Tata Steel BSL’s Profit Before Tax in July-September 2020 quarter surged by 240% YoY & 5600% to 342 crores as compared to pre pandemic January-March 2020 quarter.”

Mr Sood added “It is also observed that an artificial scarcity of HR Coil is being created by exporting HR Coil which is to the extent of almost 20% of the gross production of HR Coil during the period April to November 2020.”

He urged the government “Keeping the above in view and in the overall interest of the downstream industry, manufacturing industry and infrastructure sector, to revert import duty on HR Coil back to 5% and consider a temporary ban or imposing export duty on HR Coil for the period of six months only.”

Cold Rolled Steel Manufacturers Association of India represents the secondary & non integrated producers of cold rolled products in India with an annual production capacity of over 6million tonnes of cold rolled, galvanised, colour coated, tin plates and electrical steel

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