Tag: ISSDA

Stainless steel production declines by 19% to 3.17 MT in CY2020: ISSDA

New Delhi: Stainless steel melt production in India stood at 3.17 million tonnes (MT) in CY2020, registering a decline of 19% over CY2019 as per the latest figures released by the Indian Stainless Steel Development Association (ISSDA). Despite the pandemic-induced lockdown in the April-June’20 period, which halted the production in the country during the quarter, India continued to be the second-largest producer of stainless steel globally. The Indian stainless-steel production for CY2019 was recorded at 3.93 MT. The stainless steel production and demand saw a V-shaped recovery in India from July’20 onward after the government began relaxing the lockdown.

Global stainless steel melt shop production decreased by 2.5% to 50.9 MT in CY2020 compared to 2019, according to the latest data released by the Brussels-based International Stainless Steel Forum (ISSF). China remained the leading producer accounting for more than 50% of the global stainless-steel production at ~30 MT and the only country to record a production increase of 2.5% in CY2020 over the preceding year. All other regions, including Europe, the US, and Asia, saw a dip in production in CY2020 on account of the impact of the pandemic.

Commenting on the development, President, ISSDA, Mr K K Pahuja said, “Performance of the domestic stainless steel industry is fair, considering the severe impact of the pandemic on the entire value chain. Efforts by the industry along with government stimulus helped in gradual recovery post July’20. As the economy is gradually regaining momentum, the government must look at sector-specific concerns to provide further policy stimulus. Revoking of countervailing duties on imports from Indonesia and China may impact the current growth of the sector in this calendar year and again lead to dumping of stainless steel.”

To revive the Indian stainless steel industry urgently, ISSDA has urged the government to adopt a multi-pronged strategy of boosting local manufacturing and curbing unwarranted imports in the country. ISSDA expects a glut of stainless steel imports at a time when the domestic industry is struggling to cope with the disruptions caused by the pandemic. India is a large and lucrative market, and with the suspension of duties, China and Indonesia are expected to resort to aggressive dumping. For an industry with high import intensity, this could aggravate unemployment in the sector, particularly in the MSMEs, which constitute one-third of the capacity.

MSMEs utilizing only 50% capacity; subsidized imports will turn manufacturers into traders

New Delhi: Indian Stainless Steel Development Association (ISSDA), India’s apex stainless steel body, has voiced concerns about the impending adverse impact on domestic industry due to the temporary revocation of trade remedial duties on importing stainless steel, as announced in this year’s Union Budget. ISSDA, along with four major associations representing MSME stainless steel producers, namely The Wazirpur Industrial Estate Welfare Society, Delhi; Rajasthan Stainless Steel Re-rollers Association, Jodhpur, Rajasthan; Jagadhri Stainless Steel Re-roller Association, Haryana; and Stainless Steel Re-rollers Association, Ahmedabad, Gujarat has urged the government to reconsider this step as it will distort the domestic market by flooding it with subsidized stainless steel from China and Indonesia, and will lead several MSME players to the verge of bankruptcy.

Mr K K Pahuja, President, ISSDA said, “The government reversed six trade remedies out of which three relate to stainless steel, which is just 3% of overall steel industry in India. Therefore, it has disproportionately impacted stainless steel, including its MSME sector, and considerably dipped the market sentiment. It is noteworthy that MSME sector constitutes about 35% of the domestic stainless steel industry, spread across the country, and is a major supplier for utensils and household segments. However, the installed capacity for manufacturing stainless steel in the MSME sector is ~15 lakh tonnes, with less than 50% being utilized. Keeping this in mind, a potential market brimming with unregulated and cheap imports of Chinese stainless-steel goods is expected to make MSME players go bankrupt or turn them into traders. The demand generated by a growth-oriented budget may be captured by cheap dumped imports by Chinese companies, in and out of China. This will further have an adverse impact on prospective investment in the domestic industry, which has been in financial stress for more than a decade and will lead to loss of employment. This move is poised to drift away from Make in India stance of the government, while leaving the domestic industry at the mercy of foreign players instead of being Atmanirbhar.”

While China has over 30% surplus capacity for stainless steel production, huge capacity additions backed by Chinese investments have brought the installed production capacity of Indonesia to 30 lakh tonnes in the last 2-3 years, along with an additional 25 lakh tonne capacity in the pipeline. Interestingly, Indonesia’s domestic consumption is a mere 0.2 lakh tonne. Consequentially, the two nations have been dumping subsidized and substandard stainless steel products in India and other global economies in heavy volumes and unregulated manner in the past several years. China and Indonesia are also known to provide non-WTO compliant subsidies to the tune of 20-30% to their domestic manufacturers, rendering the global stainless steel market significantly destabilized. Consequentially, all economies have countered this irrational dumping by enforcing additional trade remedial duties.