ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

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Steel Industry : Will the Good Times Last?

Will the Good Times Last? After nine years of drift, a revival deal for Indian Iron and Steel Co (Iisco) may finally be in the offing. The rehabilitation package for SAIL

Global Steel: Towards a Meltdown

The Bush administration's decision to impose tariffs of up to 30 per cent on steel is not only designed to save the US steel industry from imports, ostensibly for a three-year period, but also to accentuate its consolidation with massive subsidies and tax write-offs. Whether these measures will achieve their goals is open to question.

Steel : Protectionism Won't Work

The agreement on capacity cuts in steel reached at the Paris meeting of producing countries this month is under threat of being undermined by a US proposal to impose tariffs on imports. The International Trade Commission, a US government agency, has recommended duties of up to 40 per cent on most import items, in a bid to protect the high-cost, loss-making US steel industry. Steel exports to the US, including from India, will virtually dry up if president Bush endorses the tariffs in February 2002. The European Union has already declared that the Paris deal would not be implemented if the US went ahead with its import curbs. The EU is also preparing for action at the WTO if the US does not back off. With the hardening of positions, some tough bargaining must precede any concerted international effort to shore up the global steel industry, which is facing its worst crisis in decades, with a production glut and poor demand pushing down prices to 20-year lows.

Anti-dumping Probe:A Case Study in Steel

Countries across the world are resorting to dumping of steel, reflecting the malaise gripping the industry. This has resulted in a spate of anti-dumping investigations and imposition of dumping duties. India is not an exception to this phenomenon. While the country has set up investigations into allegations of dumping, especially by the CIS nations, Indian steel itself is the subject of probes and dumping duties by several countries. Here we discuss one such investigation conducted by India.

McKinsey's Plan for Russia

Well researched and penetrating though it is, the report on Russia prepared by McKinsey, the renowned consultants, is no more than a wish-list of foreign investors in Russia, actual and potential. Far from unlocking the forces of growth, the report's recommendations would lead to further underdevelopment and the enormous talents of the Russian people would be effectively bottled up for long years.

Steel : Time to Look Inward

Indian steel has been virtually shut out of the US following the notification by the latter of final anti-dumping duties on imports from India, along with eight other countries. The levies, to apply for five years on US imports of hot-rolled coils, range from 29.35 per cent on Essar Steel to 43.04 per cent on Ispat. Tata Steel, Steel Authority of India and Jindal Vijayanagar Steel have been slapped with a weighted average duty of 33.17 per cent. The levies also include countervailing duties, ostensibly to counter the subsidies received by Indian steel exporters from the government. Hot-rolled steel exports to the US, India’s largest export market, earned Rs 900 crore in 2000. The Indian industry has called the US commerce department’s move protectionist. Huge imports from more efficient producing countries in recent years have pushed several US steel mills into bankruptcy and layoffs. The patriotic fervour to protect the US industry appears to have gained ground after the September 11 terrorist attacks. The US administration appears to have moved rather quickly to defend the interests of its high-cost steel producers.

Steel : Hitting the Lows

The Indian steel industry is passing through difficult times with stagnant demand, overcapacity and poor price realisations. International prices of steel have dipped to rock-bottom levels, the lowest in 20 years. Following liberalisation and particularly during the high growth years of the economy the consumption of finished steel in the country grew at an average rate of 17 to 18 per cent per annum during 1994-95 and 1995-96 from 15.5 million tonnes to 22.2 million tonnes. However, the recessionary trend since then in most of the steel consuming segments like capital goods, consumer durables and housing construction, coupled with lack of investment in infrastructure segments has led to a virtual stagnation in domestic steel consumption.

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