Davis Index: Market Intelligence for the Global Metals and Recycled Materials Markets

India’s stainless steel hot-rolled coils (HRCs) capacity remains at a low 2.2mn mt per annum which is causing a demand-supply gap of more than 1.5mn mt annually, according to Chromeni Steels, a major producer of cold rolled coils (CRC). Apparent stainless steel consumption is around 3.7mn as HRCs and CRCs application demand keeps increasing from various downstream producers including pipe & tubes, utensils, architecture, building & construction, automobile, railways & transport and white goods. Stainless steel demand growth in India is around 6-7pc CAGR (compounded annual growth rate), the highest in the world, noted Chromeni Steels in a press release. 


Domestic supply of stainless steel exceeds domestic demand making India a net importer of stainless steel, a key raw material for many MSMEs that manufacture downstream products. The demand deficit can be met through imports of HRCs which can be further rolled into CRC and other desired downstream products, said the company. This way India can meet its dual agenda of becoming self-reliant and ‘Make In India’. 


Obstacles of AD and CVD

Anti-dumping duty and countervailing duty imposed by India on imports of HRCs have created an imbalance in the market, the key raw material is excessively high priced for India’s downstream stainless steel industries, however, there is no import restriction on imports of finished stainless steel products, points out Chromini. Imports of finished value-added products become more attractive and price competitive relative to those produced in India. This will lead to adverse situation which will make India reliant on imports of these value-added finished products making India a high-cost economy and harmful to the thousands of MSME manufacturers. 


Chromini believes that importing HR coils without tariffs would be the most sensible and viable option, if those MSMEs would further process HRCs into other downstream products. Steps must be taken to nurture the growth of the MSMEs involved in SS sector whose survival hangs by a thread if downstream consumers opt for imports of finished SS products. Chromeni has set up an integrated plant to manufacture stainless steel CRCs in Gujarat with a capacity of 700,000mt. The company will manufacture CRCs from imported HRCs.

Leave a Reply

Your email address will not be published.