India Steel Market Watch
November 24: Narendra Singh Tomar, Minister of Mines & Steel, recently said that “appropriate steps will be taken by the government on continuous basis to ensure that the stress in the steel sector in the country is appropriately addressed. We are in continuous touch with the stakeholders to understand various related issues and are trying to ameliorate their problems, within the framework of a deregulated steel sector.” He was speaking at a meet on “Challenges in Steel Sector & Reforms in Mining Sector’ in New Delhi.
He admitted that the government was aware of the difficult financial situation in the country. Imports increased 75.5% in FY2014-15. During April to September, 2015, imports have increased by about 42% compared to the corresponding period last year.
Domestic steel prices have maintained a sharp downward trend during the period.
The reason behind this is the global overcapacity. On the other hand, demand of steel is either decreasing or is stagnant.
The estimated excess capacity is around 550 million tons and 25% of the total global capacity. China has maximum overcapacity which is nearly 250-300 mt. That is why China exports steel to other parts of the world at a lower price, sometimes even below the cost of production.
Tomar further added: “Since the beginning of 2015, lots of reforms have been initiated in the mining sector, beginning with the Mines and Minerals (Development and Regulation) Amendment Act, 2015 (MMDR Act, 2015). The Ministry of Mines has framed various rules under the Act, like the Minerals (Evidence of Mineral Contents) Rules 2015, the Mineral (Auction) Rules, 2015, the NMET Rules, the Mines and Minerals (Contribution to District Mineral Foundation) Rules etc and these have been conveyed to the states to administer auctioning of mines in a transparent manner.”