Indian Secondary Steel Industry is in a grind between raw material and power shortage as well as cost. Steel 360 spoke to Mr. Dev Gupta, General Secretary, Induction Furnace Association of North India and Chairman, AIFA, Punjab Chapter, and discussed about the impact of the custom duty being implemented on the scrap.
Here are the excerpts:-
Secondary steel sector uses Steel Scrap as feed material along with Sponge iron. We always try to produce quality steel through greater proportion of Steel Scrap since Sponge iron quality is never monitored for want of a BIS standard which has not been issued under the pressure of integrated and large steel producers. This lobby is also the largest producer of Sponge iron.
As such the primary steel producers are eyeing this sector to utilize their spare capacities in producing the long products and sell Sponge iron. These industrialists are using Iron ore and Coking coal which is available to them at very minimum cost from their captive mines. These natural resources are not going to last for long and the alternate route of secondary steel is utilizing Sponge iron and Steel Scrap as feed material. Hence in view of the poor Sponge iron quality and lower domestic Scrap availability, this sector would need more and more imported Steel Scrap.
There was no customs duty on Steel Scrap till 2013 but this lobby is now trying to crush this sector in the above manner. If this custom duty of 2.5% is not abolished, this sector shall die its natural death and the common man shall be forced to buy steel almost at double the current price.
(The full text of the interview is available in the June issue of the magazine.)