Job Vacancies

India steel makers eye export boom in near future

When prime ministerial hopeful Narendra Modi asked at an election rally if anyone knew of a country that exported wheat but imported bread, steelmakers joined his followers to cheer.

For steel executives, it was just what they wanted to hear: their calls to restrict exports of iron ore further will be met if Bharatiya Janata Party wins the poll.

While the move would mean a captive supply of iron ore for steelmakers, it would further dim the prospect of Indian iron ore returning in a big way to the world market. A steep drop in Indian shipments in the past two years has given Australia and Brazilian miners a bigger share of top market China.

One of Modi’s main election planks is to crank up manufacturing to create millions of jobs by focusing on exporting steel, not iron ore; textiles not cotton.

The gainers of any move to discourage iron ore exports would be steel makers that do not have captive mines and buy ores, such as Kalyani Steels, JSW Steel and Kirloskar Ferrous Industries, as well as international miners such as Rio Tinto and BHP Billiton.

Iron ore exporters such as Sesa Sterlite and Essel Mining, a unit of conglomerate Aditya Birla Group, could lose out. Mining bans in Goa and Karnataka have already taken a toll on Sesa, which operates in both states.

The BJP will also consider incentives for steelmakers as part of its push to promote value-addition, said Narendra Taneja, part of the party’s central economic group. Taneja said that, if elected, the BJP “will go for a policy shift in the direction of value-added products when it comes to iron ore or other natural resources”, but added that it was too early to talk about export duty structures.

“Only exports of value-added products should be allowed and by value addition at least it should go up to manufacturing of (semi-finished metals) blooms or billets,” said RK Goyal, MD of Kalyani Steels.
Source: Reuters