Emphasis on increasing spending on infrastructure to increase demand for steel

Kolkata, Ta. October 30, 2019, Monday

Demand for the steel sector has increased demand on public infrastructure and cuts in the Goods and Services Tax (GST), demanded by the steel industry. Steel prices are currently at a six-month low. Steel imports are seven to eight percent lower than domestic prices.

Many secondary producers have been forced to cut their production due to margin pressure. Considering this fact, the reduction in corporate taxes does not make a significant difference to the industry.

The reduction in corporate taxes is positive in the long run but it is necessary to increase demand further. Steel prices are falling every month. Sales volumes of steel companies are going down. Working profit is also declining. "In the auto sector, GST rate has to be reduced from 5% to 5%, only then will the demand increase," said a steel company sales department official. Auto sales have been slowing down since November of last year. Structural costs have also been reduced since then.

About 7% of the steel consumption in the country is behind the structural and construction segments. Steel consumption in the automobile sector is 5%. The automobile uses value added and high quality steel. HR Coal prices are currently bidding at Rs 5 per tonne. Ten months ago, the price of steel was at Rs 5 per tonne.