India Aims to Double Steel production in Next Two Years

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Dec. 15 – India is aiming to more than double its steel production to 124 million tonnes by 2011-12 and further raise it to 280 million tons by 2020, Steel Minister Ram Vilas Paswan told ministers at the upper house of Parliment the Rajya Sabha. India which currently ranks fifth in steel production globally produced 54 million tons this year.

At the same time, NMDC ltd, India’s largest iron-ore producer, announced that it may need to cut production because of falling demand for steel. NMDC’s iron-ore sales in the domestic market have fallen by as much as 30 percent, while steel consumption in the country fell to 1.75 percent from a high of 13 percent Bloomberg reported. International exports to China and Austrailia are also expected to fall next year as demand slumps. Prices of steel have fallen since June.

As a result of a cut in production and lowered international prices steel imports into India from China, Thailand and Ukraine increased by more than 70 percent to 1.4million tonnes in November against 8,00,000 tons during the same time last year. Shipments into India were 25 percent cheaper than the international price of US$600-700 per ton India's steel ministry said.

Last month, the government imposed 5 percent import duty on steel products to protect the domestic industry but experts feel the move will be ineffective in curbing imports as at the same time China withdrew export tax on some steel products to get rid of surplus stock. Although the Indian government has initiated an investigation into dumping, steel producers know it will be sometime before any action is taken.