The conflict of interests among the primary hot rolled (HR) steel makers and secondary producers is out on the roads again. This is after the Centre extended protection to the hot rolled steel manufacturers by removing the product from the list of open general licence (OGL) and putting it under the restrictive list in the last week of November.

 

Now, the cold rolled steel makers have demanded the same protection.

 

Cold rollers use HR steel as raw material and sell their products to the automobile sector, consumer durables, cycle and furniture industry, electrical equipment, engineering goods and for low-cost roofing purpose.

 

“While the cold rollers will need licence for importing raw material, the buyers of their produce will remain free to import cheaper. Either the downstream users too should be brought under the restricted licensing system, which also involves payment of money at every level or the notification should be withdrawn,” the Executive Director of the Cold Rolled Steel Manufacturers’ Association (Corsma), Mr S.N. Mathur, said.

 

“We have urged the Commerce Ministry to put all steel items such as cold rolled steel, GP/GC sheets, pipes and tubes and all other grades of specialty steels that are imported under the restrictive list, he said.

 

Interestingly, it was the same argument used by the HR steel makers. They said that cheap imports were destroying their market to convince the Government to remove HR steel from the OGL and put it under the restricted list.

 

At that time, the HR steel producers’ argument was that cold rollers are importing cheaper steel from abroad and Indian HR producers were building up inventories and cutting production. So bring import under control, they said. Only then would buyers buy from domestic producers. HR producers, would, then in turn utilise these profits to fund their expansion plans. If profits are inadequate, future expansion programmes will not take off, they argued.

 

Now, the same stand has been taken by cold rollers. They argue that who will buy their steel products if imports are cheaper.

 

Regarding the modalities of the licensing system, Mr Mathur said that a committee is to be formed with representatives from the Ministry of Commerce, Steel and Finance which is supposed to examine the licence applications and then recommend the issuing of licences.

 

The Steel Secretary, Mr P.K. Rastogi, told Business Line, “no committee has been formed yet. The Commerce Department will decide when they will do it.”

 

Explaining the principle for granting licences, Mr Rastogi said that, “though the notification does not specify anything about trader or actual user it will be the latter who will enjoy preference for getting a licence.” –Business Line