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Steel industry wants more liquidity to boost demand

Steel producers like SAIL, Tata Steel, JSW, Essar and Ispat on Tuesday asked the government to pump in more liquidity into the system to stimulate demand for the commodity from sectors like automobile and construction.

PTI|
Jan 20, 2009, 10.29 PM IST
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NEW DELHI: Steel producers like SAIL, Tata Steel, JSW, Essar and Ispat on Tuesday asked the government to pump in more liquidity into the system to stimulate demand for the commodity from sectors like automobile and construction.

The producers, who participated in a meeting called by Steel Secretary P K Rastogi, also demanded that the import duty on steel be enhanced to 15 per cent from the present five and restrictions on shipments from overseas be continued.

"The steel industry wants the government to infuse more liquidity to boost demand for the commodity from consuming sectors. They also want an increase in import duty and DEPB rates and reduction in excise to either five per cent or nil," Rastogi told reporters after the meeting.

Asked whether the ministry will favour the demands of the industry, the secretary said "it would look into it and take a comprehensive view".

Pointing out that the steel sector was under "tremendous stress", the secretary said the companies are poised to witness a steep fall in profits in the their third quarter results. "Many companies will post lower profits and some will even not post any profit (in the Q3 of FY'09)," Rastogi said.

Steel prices have "bottomed out" and if any firm reduces rates further it will be losing on its margin, he said.

For the April-December period steel production grew by a marginal 1.1 per cent to 42.1 million tonnes, while consumption dipped by 1.3 per cent to 38.7 million tonnes against the year-ago period.

Rastogi said in the October-December period the commodity intake grew by 13 per cent and its production increased by 7.8 per cent as against the corresponding period last year.
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