Syedain Abbasi (second from right) and Sharad Mahendra (left) in Calcutta on Friday. Picture by Kishor Roy Chowdhury

Calcutta, Sept. 12: The steel ministry will review next month the rising trend in imports, especially from China, and will take a suitable measure.

“There had been 22-23 per cent rise in steel product imports during the April-August period over the corresponding period last year. We are watching the situation,” joint secretary in the steel ministry Syedain Abbasi said.

“If the trend continues, we may consider suggesting steps after a review by October,” he said after a conference on steel organised by the Bengal Chamber here today.

The industry has witnessed a sharp rise in the import of steel rebars from China as well as alloy steel. The possible step could be revising the import duty.

At present, steel import duty is 7.5 per cent and it could be hiked to 15 per cent without violating WTO norms, Abbasi said.

The ministry has already alerted the customs department to check the standards and match the quality certifications of the imports, as an immediate step. If this trend continues, India will end up importing around 6 million tonnes (mt) of steel this year against 5mt last year.

Abbasi said compared with other manufacturing sectors, steel imports of up to 5 per cent of domestic production at the current import duty level cannot be termed bad. However, more import is definitely not desirable.

As there had been supply-side constraints of iron ore, India will be lucky if it reaches an output 135mt in 2014-15, he said.

Last year, iron ore production stood at 150mt against 200mt in the previous year.

In order to increase iron ore availability to the domestic industry, the steel ministry has suggested that the government allow captive mine owners to sell in the open market, the aggregation of small mines and then auction to increase viability and a quick renew of the leases of the mines.

Steel makers such as Tata Steel and SAIL may face trouble as the Jharkhand government has ordered the closure of 12 iron ore mines in West Singhbhum district, running under second and third subsequent deemed renewal.

JSW Steel

Sajjan Jindal-owned JSW Steel is in the final stages of negotiations to buy a “part” of bankrupt Italian steel maker Lucchini.

“We are at an advanced stage of negotiations. We hope to close the deal in a month’s time or so,” JSW senior vice-president (global sales), Sharad Mahendra said today.

Lucchini is also reported to have received a binding offer from JSW Steel for its core assets in Piombino and is considering the offer.

Mahendra said JSW was only keen to take over the assets of 1mt steel rolling mill of the Italian company for steel processing and not the steel making facility.

The Piombino plant on the Tuscan coast includes a blast furnace, a steel mill, a coke plant, three re-rolling mills and facilities at the port.

According to foreign media reports, the leading labour union has expressed opposition to any 'piecemeal' sale.

Asked about investment in the takeover, Mahendra said, ”There will be no major upfront investment. Most capital requirement would be for working capital.”

He said the Italian government is keen on the transaction for sake of employment and value added products.

The deal will give JSW access to European steel market and export opportunity for semi processed steel to Europe.

”We want to export our Indian semi-steel products like billets for processing and selling in Italian and other European markets,” Mahendra said.

Meanwhile, speaking about the iron-ore issue, Mahendra said supply constraints from domestic sources has forced JSW to import iron-ore from markets like Canada, South Africa and Brazil.        ”We are already importing and total import of iron-ore would be 6-7 million tonne on an annual basis as things stand now,” he said.

It was nil last year and most of the imports would be meant for 10 million tonne Karnataka plant, capacity of which would get ramped up to 12 million tonnes by December.