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Crude Steel Production Grew 4.4% Annually To 120.29 MT In 2021-22: Govt Tells Rajya Sabha

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The domestic production of iron ore is sufficient to meet the current demand and requirements of the domestic iron and steel industry, the centre said

The crude steel production grew at 4.4 per cent annually (compound annual growth rate) from 88.97 MT in 2014-15 to 120.29 MT in 2021-22, said Minister of Coal, Mines and Parliamentary Affairs Pralhad Joshi in a written reply in Lok Sabha on Wednesday.

Further, he cited data and said that the domestic production of iron ore is sufficient to meet the current demand and requirements of the domestic iron and steel industry.

“The government has not limited the expansion of mines by amending the renewal of licences rule in the Mineral Concession Rules in the country including Rajasthan. Rather, a uniform lease period of 50 years has been prescribed to ensure certainty in the mining lease period,” Joshi said.

The production data of iron ore for Rajasthan for the last three years is 1.01 MT in 2019-20, 1.08 MT in 2020-21 and 1.23 MT in 2021-22.

exports 3

India’s Steel Output Up 5% To 10.34 MT In November: Report

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According to SteelMint data, the nation produced 9.88 MT of steel in the same month of 2021

India’s crude steel production increased by around 5 per cent to 10.34 million tonne (MT) in November 2022, according to SteelMint India.

The top six steel producers, SAIL, Tata Steel, JSW Steel, JSPL, AMNS India, and RINL, produced 6.28 MT of steel, and the remaining 4.06 MT came from the secondary sector, according to the research firm.

According to SteelMint data, the nation produced 9.88 MT of steel in the same month of 2021.

Large producers produced 6.09 MT of steel together in November 2021, while the secondary industry produced 3.79 MT, it continued.

In November of the previous year, the production of finished steel increased by 3.41 per cent to 9.55 MT from 9.23 MT.

In comparison to a year before, the alloy’s usage increased 13.42 per cent to 9.66 MT.

SteelMint reported that completed steel exports decreased by 53 per cent to 0.34 MT from 0.72 MT in the same month last year, while imports nearly quadrupled to 0.60 MT from 0.31 MT.

Steel cfo

Govt’s Duty Rollback Decision May Not Benefit Steelmakers: Experts

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Also, the industry is concerned about any major uptick in the steel prices that may make the government reconsider export duties. During May, in this year, the duties were introduced when the global along with Indian steel prices reached a record high which enabled lucrative export opportunities

According to the industry experts, the decision taken by the government to cut export duties on ferrous and steel products may not serve any significant boost to the listed steelmakers of the country. The reasons quoted is global demand for steel that has collapsed, limiting the export opportunities.

Also, the industry is concerned about any major uptick in the steel prices that may make the government reconsider export duties, said experts.

However, what analysts think that the duty rollback may result in some sentimental boost and the marginally revised price targets may witness upwards trend nearly by 10 per cent to 15 per cent across steel companies like JSW Steel, Jindal Steel and Power.

Also, the low inventory in the system may serve a near-term support.

The shares of Tata Steel and SAIL in terms of price targets have not witnessed any significant alterations after the rollback of export duty.

During May, in this year, the duties were introduced when the global along with Indian steel prices reached a record high which enabled lucrative export opportunities. The situation, however, has changed drastically since then.

The World Steel Association (WSA) has reduced its 2022 and 2023 demand estimates across all regions along with India. The only exceptions to this are the Middle East and Africa.

The new global steel demand growth estimates have been altered to 2.2 per cent, keeping it down for 2022. Expectedly, demand may witness a downfall in Europe and the UK, where Tata Steel has a large exposure with the help of its European operations.

The prices of steel in India during May (hot rolled coil) were more than Rs 70,000 per tonne and the steel prices in Europe were nearly 1,000 dollar (Rs 77,000 approximately) per tonne.

The reasons behind export opportunities and higher volumes for domestic steel producers were premiums in the overseas markets.

In contrast, presently, the prices in India are at Rs.55,000 per tonne, which is down between 20 to 22 per cent. The European steel prices, however, went down by more than 40 per cent to 600 dollar (Rs. 49,000 per tonne approximately).

Further, the Chinese prices are also down 30 per cent in the period. Therefore, exporting steel maybe less beneficial for domestic producers, according to industry trackers.

The prices of shares of all four major steel producers being Tata Steel, JSW Steel, Jindal Steel and Power and SAIL on 18 November remained low as compared to their previous day’s close.

CFO World

Govt Extends Quality Control Order Date For 2 Steel Grades Till 23 Jan

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The extension will last for three months till 3 January 2023, as per the notification dated 1 November 2022. The ferrosilicon is imported from countries such as Bhutan, South Africa etc to make CRGO (cold rolled grain-oriented steel) and alloy steel

The government through a notification extended the enforcement date of its Steel and Steel Products Quality Control Order for two grades of ferrosilicon and ferronickel by three months till January 2023.

“The Steel and Steel Products Quality Control Order dated December 22, 2020, and subsequent order dated April 26, 2022, the date of enforcement of Indian Standards (IS) is here by extended. For the product ferrosilicon- specification IS No 1110:1990 and specification for ferronickel IS No. 4409:1973 is extended,” said the notification.

The extension will last for three months till 3 January 2023, as per the notification dated 1 November 2022.

The ferrosilicon is imported from countries such as Bhutan, South Africa etc to make CRGO (cold rolled grain-oriented steel) and alloy steel. These are utilised for manufacture transformers, motors, rotors and other electrical items, according to experts.

The order provides an ease for the import of these two grades facilitating no duty for another three months, according to the notification.

The expert said that ferronickel is imported majorly from European countries despite Russia and China producing stainless steel and alloy steel. Such steel is applied in white goods, metros, railways etc., reported a media agency.

The decision of government is welcomed, the expert added.

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JSW Steel’s US Unit Raises 182 Million USD Debt For Texas Plant Upgradation

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The Italian government provided the Servizi Assicurativi del Commercio Estero (SACE) guarantee covering around 70 million dollar out of the total financing. The intention behind such move is promoting Italian exports. The announcement of investment came during the time when the World Steel Association made prediction that the steel demand in the US will not contract anytime during the year against other major consumers

JSW’s US unit raised 182 million dollar long-term debt for the upgradation of its plate mill in Baytown, Texas, from Italy’s Intesa Sanpaolo and Banco BPM. Nearly worth 100 million dollar of the equipment such as cutting line, rolling mill, grinding machine and water treatment system will be supplied by three Italian firms, to upgrade the facility.

The Italian government provided the Servizi Assicurativi del Commercio Estero (SACE) guarantee covering around 70 million dollar out of the total financing. The intention behind such move is promoting Italian exports. The remaining portion of capital is a term loan, said JSW Steel in a statement 27 October.

The shares of JSW Steel jumped 5.44 per cent closing at Rs. 679.45 on the BSE on 27 October showed the news after the benchmark Sensex ended 0.36 percent higher. JSW Steel holds significant operations in the USA and as well as Italy.

The announcement of investment came during the time when the World Steel Association made prediction that the steel demand in the US will not contract anytime during the year against other major consumers.

JSW Steel’s plate and pipe mill in the US recorded earnings before interest, tax, depreciation and amortisation (EBITDA) of 25 million dollar which went up by 88 per cent year-on-year. However, sequentially it was down in the previous quarter. On the other hand, the company’s Ohio unit reported loss of 40 million dollar EBITDA after sales halved.

money

Steel, Pharma And Chemical Exports May Witness Duty Refund

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The government has successfully been able to refund around Rs 13,000 crore against the duties and taxes under RoDTEP scheme

India may consider extending a key export scheme to pharmaceuticals, chemicals and steel products. Measures to support exports affected by falling demand in advanced economies are being examined crucially.

Finance ministry and the ministry of commerce and industry have started meetings and discussions over considering these sectors within the Refund of Duties and Taxes on Exported Products (RoDTEP) scheme.

From 1 January 2021, the input duty remission scheme for exporters was implemented however these sectors were not made part of it.

According to an official, after discussions with the finance ministry, a cabinet note could be taken further. The scheme employment-generating sectors includes marine, agriculture, leather and gems and jewellery.

The government has successfully been able to refund around Rs 13,000 crore against the duties and taxes under RoDTEP scheme. The refunds heads include value added tax on fuel used in transportation, mandi tax and duty on electricity used during manufacturing.

In order to expand the scheme’s coverage, the commerce department will require funds amounting Rs 2,000 crore more, according to the official.

economy

IIP Going Strong

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The basket of goods includes coal, crude oil, natural gas, petroleum refinery products, fertilizers, steel, cement, and electricity as the main component

The Index of Industrial Production (IIP) is an economic indicator released by the Ministry of Statistics. that measures the short-term changes in the volume of production of a basket of industrial products during a given period. The base year to measure this is 2010-11. The basket of goods includes coal, crude oil, natural gas, petroleum refinery products, fertilizers, steel, cement, and electricity as the main component. These are known as the eight core industries.

As per the latest estimate, the combined Index of eight core Industries increased by 3.3 percent (provisional) as compared to the Index of August 2021. The Eight Core Industries comprise 40.27 percent of the weight of items included in the Index of Industrial Production (IIP). Details of yearly and monthly indices and growth rates are provided at Annex I & II respectively. The final growth rate of Index of Eight Core Industries for May 2022 is revised to 19.3 percent from its provisional level 18.1 percent

Coal production (weight: 10.33 percent) increased by 7.6 percent in August 2022 over August 2021. Crude oil production (weight: 8.98 percent) declined by 3.3 percent in August 2022 over August 2021. Natural gas production (weight: 6.88 percent) declined by 0.9 percent in August 2022 over August 2021. For petroleum refinery production (weight: 28.04 percent) increased by 7.0 percent in August 2022 over August 2021.

Fertilizer production (weight: 2.63 percent) increased by 11.9 percent in August 2022 over August, 2021. Its cumulative index increased by 11.4 percent from April to August 2022-23 over the corresponding period of the previous year. Steel production (weight: 17.92 percent) increased by 2.2 percent in August, 2022 over August, 2021.

Cement production (weight: 5.37 percent) increased by 1.8 percent in August, 2022 over August, 2021. Its cumulative index increased by 10.6 percent during April to August 2022-23 over the corresponding period of the previous year. Electricity generation (weight: 19.85 percent) increased by 0.9 percent in August, 2022 over August, 2021. Its cumulative index increased by 10.5 percent during April to August, 2022-23 over the corresponding period of the previous year.

auto parts 2

Steel Players Expect Govt To Withdraw Export Duty

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On May 21, the government hiked the duty on exports of iron ore by up to 50 per cent and for a few steel intermediaries to 15 per cent. It also waived customs duty on the import of some raw materials, including coking coal and ferronickel, used by the steel industry.

The export duty imposed on certain steel products recently will not force steel makers to review their capital expenditure plans as top producers expect it to be a “short-term” move to stabilise inflation. On May 21, the government hiked the duty on exports of iron ore by up to 50 per cent and for a few steel intermediaries to 15 per cent. It also waived customs duty on the import of some raw materials, including coking coal and ferronickel, used by the steel industry.

The measures were taken to boost domestic availability, check inflation, stabilise prices of coal and address the issues of steel producers reeling under high input costs. However, steel industry players had said imposition of export duties on steel products will send a negative signal to investors and adversely impact capacity expansion projects under the Production Linked Incentive (PLI) scheme.

The Indian Steel Association (ISA), which represents the domestic steel companies, had said India may lose export opportunities and the decision may also impact the overall economic activity in the country. According to the steel ministry, the sector’s exports in FY22 increased by 25.1 per cent to 134.94 lakh metric tonnes (LMT), while imports dipped 1.7 per cent to 46.69 LMT.

When asked about the impact of the export duty on the industry, Tata Steel CEO and MD T V Narendran said: “We appreciate the need to control inflation and the need for some short-term measures like the export duty, prolonging this duty even after steel prices have settled at much lower levels is detrimental to the profitability of the industry.”

Ranjan Dhar, Chief Marketing Officer, ArcelorMittal Nippon Steel India (AM/NS India), said the industry remains hopeful that the export duty will be a short-term measure by the government. Sajjan Jindal, the chairman and managing director of JSW Steel, had recently said he is hopeful of the government withdrawing the levies once inflation moderates.

Asked if his company will reconsider its capex and expansion plans, Narendran said the steel industry has led the revival of private sector capital expenditure in India over the last year. It is important that the industry does not start deferring its capital expenditure (capex) plans because of this export tax. “For now we stand by our capex guidance for the year and for the next few years but we are hoping that the export tax is removed sooner than later,” he said.

Dhar said he is also of the view that as the industry expects the measure to be a short-term step, it is “too early” for the sector to review the capex plans. Tata Steel has planned capex of Rs 12,000 crore for its India (Rs 8,500 crore) and Europe (Rs 3,500 crore) operations during the current financial year. AMNS India has plans of investing around Rs 1 lakh crore over the next 10 years to set up a greenfield plant in Odisha, besides doubling its capacity in Gujarat and setting up downstream facilities.

(PTI)

economy

Indian Equities End Flat After Reports Of Export Tax On Steel Ending

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The NSE Nifty 50 index ended flat at 16,216, while the S&P BSE Sensex fell 0.16 per cent to 54,395.23. The indexes had fallen about 0.7 per cent earlier in the session

Indian shares pared most of the losses on Monday to end flat following reports the country may soon abolish export tax on key steel products to revive demand lifted metals stocks, offsetting a selloff in technology companies on demand worries. 

The NSE Nifty 50 index ended flat at 16,216, while the S&P BSE Sensex fell 0.16 per cent to 54,395.23. The indexes had fallen about 0.7 per cent earlier in the session.

The tech index fell 3.1 per cent, dragged down by Tata Consultancy Services, shares of which fell as much as 4.9 per cent to hit a three-week low, after the company missed quarterly profit estimates by a wide margin on Friday, as employee-related expenses soared.  

However, news that India government may soon lift export taxes boosted steel companies, limiting overall losses in Mumbai market, analysts said. Nifty metals index rose nearly 2 per cent.

“At least for the time being, the rally in metals stocks is offsetting losses in tech stocks,” said Prashanth Tapse, vice president (research), Mehta Equities, adding that investors were finding lower valuations in metals stocks attractive after a 13 per cent fall in June.

The Indian rupee ended at a record closing low against the dollar on Monday as continued foreign portfolio outflows from domestic stockmarkets and a broadly stronger greenback weighed on the currency despite intermittent dollar selling intervention.

Focus is now on India’s retail inflation data, due later this week, with a Reuters poll showing that the reading likely held steady in June but well above the Reserve Bank of India’s tolerance limit for a sixth month. 

Eicher Motors was the biggest gainer in Nifty 50 index, rising 3.9 per cent, while Bharti Airtel was the top loser, falling 5 per cent.

(Reuters)

rupee

Indian Equities End Flat After Reports Of Export Tax On Steel Ending

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The NSE Nifty 50 index ended flat at 16,216, while the S&P BSE Sensex fell 0.16 per cent to 54,395.23. The indexes had fallen about 0.7 per cent earlier in the session

Indian shares pared most of the losses on Monday to end flat following reports the country may soon abolish export tax on key steel products to revive demand lifted metals stocks, offsetting a selloff in technology companies on demand worries. The NSE Nifty 50 index ended flat at 16,216, while the S&P BSE Sensex fell 0.16 per cent to 54,395.23. The indexes had fallen about 0.7 per cent earlier in the session.

The tech index fell 3.1 per cent, dragged down by Tata Consultancy Services, shares of which fell as much as 4.9 per cent to hit a three-week low, after the company missed quarterly profit estimates by a wide margin on Friday, as employee-related expenses soared. However, news that India government may soon lift export taxes boosted steel companies, limiting overall losses in Mumbai market, analysts said. Nifty metals index rose nearly 2 per cent.

“At least for the time being, the rally in metals stocks is offsetting losses in tech stocks,” said Prashanth Tapse, vice president (research), Mehta Equities, adding that investors were finding lower valuations in metals stocks attractive after a 13 per cent fall in June. The Indian rupee ended at a record closing low against the dollar on Monday as continued foreign portfolio outflows from domestic stockmarkets and a broadly stronger greenback weighed on the currency despite intermittent dollar selling intervention.

Focus is now on India’s retail inflation data, due later this week, with a Reuters poll showing that the reading likely held steady in June but well above the Reserve Bank of India’s tolerance limit for a sixth month. Eicher Motors was the biggest gainer in Nifty 50 index, rising 3.9 per cent, while Bharti Airtel was the top loser, falling 5 per cent.

(Reuters)

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