India Development News & Foreign Investment Opportunities

Indian Mills Encouraged to Acquire Mines

Steel prices driven by demand


Steel prices driven by demand


JSW Steel.
JSW Steel’s Kalmesh Works.

The Indian Government is trying to encourage private and state-owned mills to go for overseas asset acquisitions for raw material as a supply security, said Minister of State for Steel, Vishnu Deo Sai.

Speaking in Lok Sabha in reply to a question on 12 Feb 2019, he said the Ministry is also taking steps to make the raw materials like iron ore, coking coal and natural gas available at affordable prices, as a support for the mills to become globally competitive.

Elaborating, he said the government does not intervene in the pricing decisions of the steel companies.

Consequently, the domestic steel prices are market driven and depend on the demand-supply scenario and the intensity of competition.

The Government has released the National Steel Policy 2017, which had laid down the broad roadmap for encouraging long term growth for the Indian steel industry, both on demand and supply sides, by 2030-31.

The Government has also implemented the preference to Domestically Manufactured Iron & Steel Products (DMI&SP) Policy which mandates a minimum domestic value addition of 15% on the imported input steel to be eligible for big ticket Government procurements and tenders.

There is also the ‘Make-in-India’ programme, which aims to provide an impetus to the manufacturing and mining sector of the country through various policy initiatives and incentives which are expected to benefit the domestic steel industry.

The Government is not contemplating any ban on steel exports, he assured.

In reply to a question whether prices of steel in the country are increasing continuously, Vishnu Deo Sai, said there is no continuous upward trend during each of the last three years and current year.

The prices fell in the initial period, from April 2015 to January, 2016, before recovering again. The prices then consolidated and rose till March 2018.

Subsequent to that, the prices showed a mixed trend before peaking in September 2018. Prices have shown a downward trend since then till January 2019, he said.

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