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BS-VI Emission Auto Norms May Lead To Higher Strength Steel - SSAB

Mneycontrol reported that the Bharat Stage-VI or BS-VI emission norm for auto companies, to come into effect from April 2020, has opened up an opportunity for steelmakers, especially those that make highly specialized steel products. The report quoted Mr Sharad Rastogi, Country Manager for SSAB in India, as saying that "The overall numbers may be small, but if you imagine the numbers of trucks made in India or the requirement India has for concrete pumps, excavators, concrete mixers…then the scope is immense. More structural steel should be replaced with specialized steel.”

It has added an element of competition in a segment that may be small in size but comes with better margins and has products that are premium. In the fray are multinational companies such as Sweden's SSAB, Japan's JFE and Nippon-Sumitomo, and domestic players, Essar Steel and JSPL.

BS-VI norms will make vehicles heavier, as auto manufacturers bring in changes to meet emission standards. For instance, tipper trucks will become heavier by three tonnes. This will not just impact the fuel efficiency of the truck, but will also lead to higher wear and tear and lower loads too. But it's possible to overcome these hurdles with specialized steel or to be more precise, with steel that has a strength of over 700 megapascals in industry jargon.

The same tipper truck that meets BS-VI norms, if made with specialised steel, will not be heavier by three tons, but by 2.2 or 2.4 tons. Saving that much in weight is crucial, despite the higher cost of steel.

Source : Moneycontrol
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Egyptian Re-Rollers Challenge Safeguard Duties on Steel Billet Imports - Report

Argus reported that Egyptian re-rollers have taken legal action against the government's decision to impose a duty of up to 15% on billet imports. Re-rollers are opposing the safeguard measures, as they claim the duties give the integrated mills, which can produce crude steel and cast their own billet, a competitive advantage. Re-rollers have seen their billet import costs rise since the safeguards were introduced on 15 April. But they are not be able to pass on the increased cost of production to end-users because of competition from local integrated mills.

Egyptian authorities decided to impose an up to 15% safeguard duty on billet and 25% on rebar imports for 180 days, effective from 15 April.

Source : Argus
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Nithia Capital keen to bid for Visa Steel – Founder Mr Jai Saraf

ET reported that London based distressed assets advisory that has emerged as the successful bidder for the distressed companies of Uttam Galva along with CarVal Investors Nithia Capital Resources is also interested in acquiring Visa Steel. Mr Jai Saraf, founder of Nithia Capital, told ET “The acquisition of the 0.5 million tonne Odisha based steel plant will be in line with Nithia s strategy of acquiring steel plants with less than one million tonne capacity backed by funds from institutional investors. For Visa Steel too, Nithia will reach out to Car-Val that will have the first right to view its plan and win nave the first right to view its plan and decide on whether it would like to pitch in with the necessary funds.”

He said “We are in discussion with various banks and actively looking at several steel assets in eastern and central India including Visa Steel.”

He added “Nithia has a strategy to create a consolidated steel operating platform of upto 2 million tonnes of steel production per year in India.”

State Bank of India had referred the company to the Kolkata NCLT last year but with the promoters challenging the move in the Odisha High Court, the company is yet to be admitted for insolvency.

Source : ET
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Neelachal Ispat to launch NINL Smart TMT rebar bars soon

ET reported that MMTC and Odisha government promoted steel public sector undertaking Neelanchal Ispat Nigam Limited will soon launch rebar branded as NINL SMART TMT, first finished product as it currently produces pig iron & billets only. Mr Sashi Shekhar Mohanty, vice chairman of NINL, told ET that the aim is to initially produce about 10:000 tonnes of TMT bars a month from billets.

He said “This should help NINL improve topline and bottomline by about 30%. In due course of time, the quantity of value-added products will increase when NINL gets its own TMT bar-cum-rod mill.”

While its bars are now being produced by an outside conversion agent, the company intends setting up its own mill for which it’s invited expressions of interest.

Source : ET
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MMK and ETM Sign Contract For Supply Of Electrical Equipment

Magnitogorsk Iron and Steel Works has signed a contract with ETM on supply of electrical equipment. The contract allows MMK to order equipment directly through the ETM iPro Internet platform, which will significantly save procurement time and increase the efficiency of the Company's supply system. The agreement with one of Russia's leading professional distributors of electrical engineering was signed for cooperation up until the end of 2020. MMK and its subsidiaries were offered an individual discount by the manufacturer of electrical equipment. To make a purchase, MMK units do not need to carry out a selection procedure and agree on technical specifications, meaning that the time required to prepare the specification will be no more than 20 minutes. When placing an order, technical specialists of the customer's workshop see the terms of equipment delivery, which significantly simplifies planning repairs in the long term.

The conclusion of a contract with ETM is part of a comprehensive program to improve MMK's supply system. It allows for, among other things, the establishment of trade with online stores to organize direct, efficient supply and to eliminate unnecessary administrative costs.

Source : Strategic Research Institute
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Vale Optimistic About Recovery Of Output At Brucutu Iron Ore Mine

Reuters reported that Vale which needs court approval to resume production at its Brucutu mine after a deadly dam collapse, told analysts it expects to do so soon. Vale said another 30 million tonnes of capacity could be restored in the second half once its Alegria, Vargem Grande and Timbopeba mines receive dry processing licenses. Vale had forecast in May that those licenses could take 6 months to 12 months.

Vale has told analysts it is focused on reaching agreements with those affected by the Brumadinho tragedy and with Brazilian authorities and expects to sign social and environmental settlements by the end of 2019 or in 2020

In addition, Vale mentioned that an investigation to determine the causes of the accident could be completed in the next three months and a final report ready in late September or early October

Vale was forced to suspend about 90 million tonnes per year of iron ore capacity after the collapse of a tailings dam in the mining town of Brumadinho killed at least 246 people, triggering a broad safety review. Brucutu is operating at only a third of its 30 million tonnes yearly capacity, using dry processing, which does not require use of tailings dams. Restoring the other 20 million depends on persuading a judge that the mine is safe.

Source : Reuters
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Tribals Continuing Protests Against Iron Ore Mining in Nandraj Hills

A protest by tribals in Chhattisgarh’s Bailadila against a mining lease being given to the Adani Group continues, in spite of the government having stayed all project activities. The protestors said they would continue their demonstrations in front of the National Mineral Development Corporation till the government cancelled the lease. Tribals from distant villages like Gangalur, Matur, Pittapal, Hurepal and Munder, have been on protest since June 7, opposing the NMDC’s allotment of Mine number 13 to the Adani Group.

The protests have slowly gained momentum, with even political parties coming forward to support them. On the second day of the protest, former chief minister of Chhattisgarh Ajit Jogi, arrived at the spot and supported the protestors.

In 2015, the forest department had given clearances for 315.813 hectares of Bailadila depository number 13 for the purpose of iron ore mining. In these areas, the NMDC and state government were supposed to do mining jointly. For this, a joint venture, NCL, was created between the two entities. However, the lease was later transferred to the privately-owned Adani Group for 25 years. Bailadila depository number 13 has potential iron ore reserves equaling 25 crore tonnes.

Source : Strategic Research Institute
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Indian Steel Mills To Supply Steel To Export Oriented Units Under Advance License Scheme - Report

Financial Express, citing three sources who attended the meeting, reported Indian steel makers like JSW, SAIL and Tata Steel have agreed to charge these bulk consumers the same price for steel at which they are exporting it to other countries. At a crucial meeting attended by commerce and industry minister Piyush Goyal, steel minister Dharmendra Pradhan, top executives of steel companies, engineering goods exporters and others it was decided that steel will be made available at this rate to only those bulk consumers who would export finished goods after value addition and not sell these in the domestic market. The steel will be made available to these bulk consumers under an advance license scheme.

Engineering goods exporters has complained that local steel producers are charging them 15-20% more than the price at which the latter are shipping out to other countries, making their products uncompetitive in the global market. However, steel-makers contest such a claim, saying the premium could at best be 5%. Engineering Export Promotion Council of India chairman Mr Ravi P Sehgal told FE that “If the steel makers are exporting at a certain price, why should they charge much higher price to domestic consumers who are using the raw materials for exporting finished goods? This discrimination against domestic consumers like us must end. It’s a huge relief ensured by the government’s timely intervention.” Against the global price of USD 450 to USD 500 per tonne, for instance, prices of a particular steel variety in the domestic market were ruling at USD 600 per tonne.”

The objective behind the latest move is to ensure that engineering goods exports double in the next five years (from around USD 81 billion in FY19) and touch USD 200 billion by 2030.

Source : Financial Express
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ICCI Wants Duties Cut On Primary Raw Material Of Steel Industry

Daily Times reported that Islamabad Chamber of Commerce & Industry has called upon the government to cut all customs and regulatory duties on the primary raw material of steel industry, like meltable steel scrap, in the budget to counter the increase in cost caused by currency devaluation, interest rate hike, raise in power tariff and new taxation measures.

In a statement issued on Thursday, ICCI Acting President Rafat Farid said the government had abolished the special procedures of sales tax for steel industry in the Federal Budget 2019-20, however, he stressed that the government should come up with some policy interventions for reducing the cost of doing business for this important industry so that it could play more effective role in the economic development and exports of the country. He said that if duties on meltable scrap were not removed, capacity utilisations of steel industry would decrease, leading to drastic fall in government revenue.

He said the government should provide a level playing field for various sectors of the steel industry, including steel melting, re-rolling, ship breaking and other downstream sectors. He said there were various tax anomalies due to which substitute products have different tariff structures that created distortions in the market.

The ICCI acting president said that re-rollable scrap was a substitute product for ship plate and steel billet manufactured by the ship breaking and steel melting industries. However, there were different import duties on re-rollable scrap and steel billets, while sales tax levied on steel melting sector was higher than that levied on the ship breaking sector.

Source : Daily Times
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Arvedi Group Closes 2018 With Positive Result

Arvedi Group closes the 2018 financial year with very positive results, in terms of production, sales, revenues and profitability. The improvement in financial debt was also satisfactory, falling by over 72 million euros compared to 2017. In summary, as at 31 December 2018 the Group recorded a + 5% in production volumes (just over 4.5 million tons) and consolidated revenues up 9.5% compared to the previous year, reaching Euro 3.126 billion, thanks also to the favorable trend in average sales prices, in particular in the first half of the year.

The gross operating margin recorded in 2018 at the Group level is in line with that of the previous year, reflecting a strong and stable competitive capacity. The consolidated gross operating result was in fact EUR 460.4 million. The result is of particular importance, given the market trend, marked by a marked slowdown in the last months of the year. Contributing the most to the result was the carbon steel segment which accounts for about 85% of the total, while among the Group companies the largest contributor was Acciaieria Arvedi, which alone is worth about 73%. In 2018, the Group's consolidated operating result amounted to EUR 269.6 million.

The consolidated net financial debt improved, which as at 31 December 2018, amounted to EUR 580.5 million with a decrease of EUR 72.7 million compared to the previous year, in full consistency with the "deleveraging" process announced in 2016. In terms of investments, in 2018 the Group invested a total of EUR 109.3 million in tangible assets of all the consolidated companies, of which about EUR 60 million for Acciaieria Arvedi.

Mr Cavalier Giovanni Arvedi Chairman of the Group said that "We are very satisfied the results achieved in 2018 because they confirm the solidity and competitiveness of our Group which is now firmly among the major players in the sector at national and international level. As I have repeatedly emphasized thanks to the investments made and the optimizations pursued on the side of production and transformation costs, today all the companies have very solid industrial bases, both in terms of processes and products, such as to be able to compete effectively. And the improvement process is still ongoing in all our companies engaged in new important investment plans.”

Source : Strategic Research Institute
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Indian Small Steelmakers Concerned About BIS Standards

Indian steel market participants have expressed concerns over the steel ministry's recent notification urging local steelmakers to obtain a Bureau of Indian Standards quality certification for all steel products, as secondary steel producers may find it hard to meet BIS requirements. Of BIS' 140 steel product standards, around 53 categories have been mandated to obtain a BIS certification for manufacture and sale. The steel ministry has appealed to local manufacturers to voluntarily acquire BIS certificates for the remaining categories.

The notification will especially affect producers that produce steel by melting scrap steel or use sponge iron as a raw material in the induction furnace. China had in 2017 eliminated the country's 140mn t/yr induction furnace-based capacity as it did not meet environmental and product quality standards, but around 30pc of India's total steel is produced through the induction furnace route.

India's total crude steel output during the April 2018-March 2019 fiscal year increased by 3.3% on the year to 106.5 million tonne.

Mr Dipendra Kashiva, executive director of the Sponge Iron Manufacturers Association said that "Induction furnace-based steelmakers are unlikely to secure BIS certificates because of the high quantities of phosphorus found in the local feedstock, which affects the durability of the finished steel product.”

The steelmaking technologies used by induction furnace-based mills are unable to reduce the phosphorus content in the feedstock. An upgrade to better technology is expected to cost INR 1,200to INR 1,500 per tonne, which may eat into the thin profit margins of these steel producers, most of which are smaller than integrated producers that use the blast furnace route to produce steel and generally have much higher rates of profitability.

The country's six integrated steelmakers Tata, JSW, Essar, Jindal Steel, Sail and RINL will be able to easily meet the BIS standards for their entire product range as the use of converters in the blast furnace-based steelmaking process reduces phosphorus levels in finished steel, enhancing its durability.

Quality certifications have been enforced over the last few years primarily as a non-tariff barrier for imports, barring overseas supplies that do not meet BIS standards.

Source : Strategic Research Institute
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Metinvest Debt Refinancing Wins European Commodities Finance Deal Of The Year Award

Metinvest, the vertically integrated group of steel and mining companies, is pleased to announce that TXF has named the Group’s debt refinancing arrangement as the European Commodities Finance Deal of the Year in its competition for the annual TXF Deals of the Year, also known as the Perfect 10.

TXF is a reputable media outlet that covers export, trade and commodity finance news and transactions. In its coverage of the award, TXF noted that despite finalising a lengthy debt restructuring in 2017, Metinvest returned to the debt markets in 2018 to close a pre-export finance facility and two bond issuances totalling USD 2.36 billion, the largest refinancing by a Ukrainian corporate to date.

To recap, in April 2018, Metinvest refinanced the lion’s share of its debt by issuing two bond tranches totalling USD 1,592 million and securing a PXF facility of US$765 million. The bond issue was the Group’s largest to date, with its lowest ever coupon and longest maturity, as well as the most sizeable issuance by a Ukrainian corporate. The investor community worldwide, including top European financial institutions, showed strong support for the transaction.

Source : Strategic Research Institute
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Saudi Steel Pipe Reshuffles Senior Board Ranks

Building materials manufacturer Saudi Steel Pipe Company has reshuffled its senior board ranks three months after it reported a near-1,000% fall in net profit for 2018, following impairment losses and reduced profitability in its titanium- and steel-making joint venture with Korea’s TSM Tech. According to a statement on Tadawul, SSP has appointed Ahmed Al-Debasi listed as the group’s marketing manager on its website as non-executive chairman on the board.

Mr Carlos Ferreyra, financial regional director for the Middle East and Africa at Luxembourg based pipeline producer Tenaris which completed its acquisition of a substantial stake in SSP this January has been appointed vice chairman of the board.

Mariano Armengol Lamazares has been made managing director and chief executive officer, with Mousa Al-Mousa appointed board secretary.

The news comes three months after the engineering and construction steel supplier reported a net loss, after zakat and tax, of USD 45 million a 983% decline compared to 2017, when it posted a net profit of USD 5 million.

A USD 22.2 million loss by subsidiary TSM Arabia a process equipment manufacturer established in 2011 between SSP (70%) and South Korea’s TSM Tech Company was also cited as a factor behind the firm's losses in its missive to Tadawul.

Source : Strategic Research Institute
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US Trade Court Rejects Duty Rate on Chinese Steel Nails

The Commerce Department must once again revisit, and possibly lower, the hefty antidumping duty rate it applied to certain imports of steel nails from China, a federal court ruled June 12. Commerce conducted a periodic duty review of Chinese nail imports that entered the US between August 2013 and July 2014. It hit Shandong Oriental Cherry Hardware Group Co and its affiliates with a 118.04% duty rate. This drew legal challenges from Shandong as well as US importer National Nail.

Source : Strategic Research Institute
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MBO At Steel Stencil Foils Manufacturer

Insider Media reported that a steel stencil foils manufacturer in Devon has been acquired in a management buyout backed by private equity firm Rockpool. Datum Alloys, based in Kingsbridge, provides precision stainless steel stencil foils to the electronics industry and is a significant supplier of its product in Europe and the US.

The company employs 32 people and has manufacturing facilities in Kingsbridge in the UK as well as Endicott in the USA.

The deal is Rockpool’s fifth investment in the last 12 months and brings the total invested to more than GBP 400 million since Rockpool was established in 2011.

Mr Pete Anniss, managing director of Datum Alloys, said that "We are excited to take Datum to the next stage as a business through driving the sale of our new products whilst continuing to provide the levels of service that our customers know and trust. Rockpool saw the potential in our business from the very beginning and their pragmatic approach throughout the process was key to completing the deal. We are glad to have their support and are looking forward to working with them over the coming years."

Mr Richard Morrison, investment manager, Rockpool, said that "Datum’s product is recognised as the highest quality in its market and the team have worked hard to build a loyal customer base through providing unparalleled levels of service. We’re looking forward to supporting management as they use Datum’s position in the market as a foundation to invest and grow their next generation of products."

Source : Insider Media
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Imported Steel To Undergo Higher Domestic Value Addition

Indian Express reported that in an attempt to provide more preference to domestic manufacturers in government procurement, the Steel Ministry has introduced a notification which mandates imported steel to undergo a higher domestic value addition in making of a product to be eligible for purchase by government departments and all its entities, including state-run firms. And unlike previously, where the minimum value addition criteria kicked in for project purchases of INR 50 crore and above, the new rules of May 29, 2019, have lowered the threshold to purchases of INR 25 crore or more. Moreover, these provisions would also kick in for government agencies whose annual procurement of iron and steel products for various projects is INR 25 crore or more. The May 2019 notification on Policy for Providing Preference to Domestically Manufactured Iron & Steel Products in Government Procurement also expands the list of manufactured products to 49 from previous 11 items.

While earlier the domestic content was limited to 15% on all 11 products, the new list of 49 products have minimum prescribed value addition ranging between 15 to 50% making it difficult for imported steel to compete with domestic bidders for government contracts.

For iron and steel products, “manufacturers/suppliers not meeting the domestic value addition targets are not eligible to participate in the bidding”. Value addition is the difference between the net selling price and the landed cost of imported input steel at a manufacturing plant in the country. The May 2019 notification also brings into the DMI&SP ambit a list of 13 capital goods which are used for manufacturing iron and steel products with minimum domestic value addition requirement of 50 per cent.

In such EPC contracts, purchase preference would be provided to domestic bidders if their quoted price falls within 20% of the price quoted for the corresponding imported capital good. The domestic bidder would then have to match the price quoted by the lowest bidder and bag the contract.

Source : Indian Express
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China Raises Anti-Dumping Duties On Alloy-Steel Pipes From US And EU

China's Ministry of Commerce announced that it will raise anti-dumping duties on imports of alloy-steel seamless pipes from the United States and the European Union. US producers of the tubes and pipes for high temperature and pressure service are subject to anti-dumping duties of between 101% and 147.8% while rates for EU companies range between 57.9% and 60.8%. The adjusted rates took effect on Friday.

China started to impose anti-dumping duties ranged between 13 and 14.1% on imported alloy-steel seamless pipes from those regions in 2014 on the grounds that the products were being dumped on the Chinese market at below market prices.

The latest decision follows a review last year that found such dumping still existed.

High temperature and high pressure alloy steel and seamless steel tubes are mainly used in supercritical and ultra-supercritical boilers and steaming-water pipes in power stations.

Source : China Org
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Indian Steel firms move Trade Remedy DG Seeking 25% Safeguard Duty On Imports

Business Line reported that representatives of the domestic steel sector have moved the Directorate-General of Trade Remedy seeking a 25% anticipatory safeguard duty. This request was flagged by the Steel Ministry officials during a meeting held earlier this week between Commerce Minister Piyush Goyal and Steel Minister Dharmendra Pradhan. The steel sector representatives, through the Indian Steel Association, have sought a safeguard duty on steel imports to curtail cross dumping of products after the US and EU set up tariff and quota barriers. The application for the same was moved in February and the DGTR is currently investigating the case, steel sector representatives said.

The products under the purview of the proposed safeguard duty are semis, flats, longs, pipes and tubes, stainless steel and Railway products. The proposed duty is 25 per cent at ad valorem basis and covers most of the steel products manufactured by the domestic industry.

Steel products that are not substantially manufactured in India, including API grade steel and CRGO, are listed as products excluded from this duty.

To plug instances of circumvention of duty by importing marginally different grades of products, the industry has also sought that the entire value chain of products be brought under the ambit of the safeguard duty.

Highlighting the cross dumping into India, the Steel Ministry officials said that exports to the US from China, Japan and South Korea have fallen by 488,000 tonnes in six months since the imposition of the duty barriers by the Trump administration. During the same period, exports from the three countries to India grew by 561,000 tonnes.

Sector representatives told BusinessLine that “The blanket duty steel import has boosted domestic production in the US and there is a steel surplus of sorts in the American market. In Europe, a nearly 75% of the permissible steel import quota for the financial year has already been booked.”

These anticipatory safeguard measures are permissible under the World Trade Organization.

They said that “The window to book the remaining quota will be opened soon and that too will be lapped up. It is then that we will see a surge of dumping from China, South Korea and Japan into India. So the safeguard duty, to protect the domestic industry, must be in place before this situation arises.”

Source : Business Line
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Tata Sponge To Raise INR 1,800 Crore Via Rights Issue

ET reported that Tata Sponge Iron, a subsidiary of Tata Steel, is planning to raise up to INR 1,800 crore through a rights issue to primarily retire existing debt early, said two people familiar with the matter. The company had raised debt to help fund its acquisition of the steel business of debt-ridden Usha Martin.

The board meet on Thursday to consider the terms of the right issue, including the rights entitlement ratio, total number of shares to be issued, issue price and record date. It has already obtained approval from stock exchanges for the proposed rights issue.

Tata Sponge Iron is expected to price the rights issue at about 20-25% discount to the current market price: one of the persons cited above told ET. Axis Capital SBI Cap, Centrum Capital are helping the company to run the issuance. Individual arrangers could not be contacted immediately for comments.

Source : ET
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Govt To Take Steps To Contain Imports Of Defective Or Sub Standard Steel

Financial Express reported that government will take more steps to contain imports of defective or sub-standard steel with a view to helping domestic manufacturers, an official said. The official said that local players prefer imports of defective or sub-standard steel as it is cheaper. According to industry experts, sub-standard steel impacts the quality of goods and hurt domestic manufacturers. The issue was discussed during a high-level meeting of steel and commerce ministries Tuesday. The official added that “There is a need to contain imports of defective and sub standard steel. It comes in India because it is cheap in price,”

There are already quality control guidelines for various steel products used in various industries to check imports of sub-standard items. It was also decided to provide steel at affordable rates to engineering exporters, which have complained that the domestic steel makers charge huge margins from them.

Engineering exporters use steel as a raw material to manufacture products for export purposes. The official added that “It was decided in the meeting that steel would be provided to engineering exporters at affordable prices and benefits of advance authorisation scheme will be passed on to steel makers. The nitty-gritties will be finalised by the directorate general of foreign trade on this.”

crucial raw material, as compared to international market, has resulted in non-competitiveness of Indian downstream engineering exports. The ministries of commerce and steel Tuesday assured engineering exporters of making all the efforts to ensure the sector’s outbound shipments reach USD 200 billion by 2030. The country’s engineering exports rose by 6.36% to USD 83.7 billion in 2018-19 from USD 78.7 billion in 2017-18.

Source : Financial Express
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