During the period import of seconds and defectives grew to 0.23 million tonnes from 0.11 million tonnes in the corresponding period last year. This has put further pressure on the domestic steel industry. The Indian government has restricted the import of defectives or seconds from three designated ports of Mumbai, Chennai and Calcutta. This is an attempt to curb the import of prime grade material under the guise of seconds by paying lower import duty. This move will hurt the seamless tube manufacturers and the alloy steel industry.
Exports are also likely to be hit.
Though the results were not very good, there was a rally in the old economy sectors particularly the steel, banking, power and auto sector. Other income also declined substantially as last year in the corresponding quarter the company had booked income from the sale of the cement division. The company's restructuring plan focuses on being the cheapest mild steel producer and would be divesting off all its non-core activities. Essar Steel has registered net profit of Rs150.8mn as against loss of Rs1,160.5mn, corresponding quarter last fiscal. There has been an improvement in iron ore exports.