Steel 360 Magazine - April 2016

In this issue

Owing to scanty demand, Financial Year 2015 witnessed a steep fall in commodity prices globally bringing down steel offers (for some products the price fall even touched a 10-year low), leading to immense pressure on operating margins of the steel plants worldwide. Besides, weak demand in major steel-producing (neighbors) nations such as China, Japan and South Korea have forced them to focus on exports at aggressive prices to large consumers like India, hurting the financial health of the Indian steel makers further. Many companies are now struggling to repay bank loans and this has added to the pile of non-performing assets (NPAs) in the banking system.

Moving away from this extended industry paralysis, experts and participants are hopeful of better production level and steel prices in the new financial year owing to duty restrictions that will protect Indian steel makers from the onslaught of dumping by its South East Asian competitors to some extent. Howsoever, only efficiency improvements can help the industry in the longer run, they opine.

Repeated persuasion from industry associations and the ever increasing NPAs with many nationalized banks has propelled the government to take protective measures that could salvage the domestic iron & steel industry. In the gone by year, the Government of India has implemented multiple control measures that will go a long way in reinstating the native industry. These include increasing import duty in June & August of 2015 to MIP & Safeguard duty (in February & March of 2016) and very recent announcement of Quality Control Order. Read more from pg 24.