Lok Sabha Question No. 4305 (UNSTARRED), answered on 2021-03-22
Subject: Analysis of Rise in Steel Prices
Ministry: STEEL
Asked by: Dayanidhi Maran

THE MINISTER OF STEEL

## GOVERNMENT OF INDIA MINISTRY OF STEEL

## LOK SABHA UNSTARRED QUESTION NO.4305

FOR ANSWER ON 22/03/2021

## ANALYSIS OF RISE IN STEEL PRICES

4305.  SHRI DAYANIDHI MARAN:

Will the Minister of STEEL be pleased to state:

- (a) the steps taken/ being taken by the Government to control price rise of steel;
- (b) whether the Government has conducted any analysis or report on the impact of the price rise in steel industry affecting capital expenditure forecasts and if so, the details thereof ; and
- (c) whether the Government has conducted any analysis/ report on the impact of the COVID-19 pandemic and subsequent lockdown on the steel industry and if so, the details thereof?

## ANSWER

(SHRI DHARMENDRA PRADHAN)

- (a) Steel  is  a  deregulated  sector  where  prices  are  a  function  of  demand  and supply,  global  market  conditions,  trends  in  price  of  raw  materials,  logistics  cost, power and fuel cost etc. Various steps taken by the Government, inter-alia, include the following:-
1. Ramping up of Steel Production:-

After a decline in production to 22.17 MT during April to July, 2020 following the  Covid-19 pandemic vis-à-vis 35.16 MT during the Corresponding Period Last Year (CPLY), the production has increased to 63.26 MT during August, 2020 to February, 2021 vis-à-vis 60.27 MT during CPLY.

2. Ramping up of Iron ore Production:-
2. (i) Ramping up of planned production by NMDC Ltd. from 32 MT (2019-20) to 35 MT (2020-21).
3. (ii) Neelachal Ispat Nigam Limited (NINL) allowed to sell iron ore from the existing leases up to 2.0 MT.
4. (iii) Steel Authority of India Limited (SAIL) allowed to sell 25% fresh fines and 70 Million Ton dumps with about 4.0 MT being made available in the open market during, 2020-21.
5. (iv) Guali  and  Jilling  Langlota  Iron  Ore  Mines  in  Odisha  reserved  for  the State  PSU  viz.,  M/s.  OMC  for  a  period  of  10  years.  Government  of Odisha has recommended reservation of Teherai Iron Ore Mine Blocks in favour of NMDC Ltd.
6. (v) Operationalization  of  expired  leases  of  iron  ore  mines  post  auction  in Odisha and Karnataka.

Contd………….2/-

## 3. Reduction in BCD and Revocation of Trade Remedial Measures:-

In  the  Union  Budget  2021-22,  the  Basic  Customs  Duty  (BCD)  has  been reduced uniformly to 7.5% on semis, flat and long products of non-alloy, alloy and stainless steel. BCD on steel scrap has been exempted for a period up to 31 st March, 2022. In addition, ADD and CVD on certain steel products have also been revoked/temporarily revoked.

(b) The Second Advance Estimates of  National Income, 2020-21 and Quarterly Estimates of Gross Domestic Product for the Third Quarter (Q3) of 2020-21 brought out by National Statistical Office (NSO),  Ministry of Statistics  &  Programme Implementation  indicate  that  Gross  Fixed  Capita  Formation  (GFCF)  during  Q3  of 2020-21 at Rs.11,93,993 cr. was 2.56% higher than GFCF of Rs.11,64,138 cr. during corresponding  quarter  last  year.    Also,  GFCF  has  increased  in  each  successive quarter during the current fiscal.

(c) Following the Covid-19 pandemic and the resultant lockdown measures, there was disruption  in  the  supply  chains,  logistics,  availability  of  human  resources,  raw materials and working capital etc., leading to a sharp reduction in production as well as  consumption  of  steel  during  the  period  from  April-July,  2020.  With  gradual unlocking measures undertaken by the government, the production and consumption of steel have since recovered and even crossed the previous year's levels during the recent months. The details of production and consumption of steel during April - July, 2020 and August, 2020 - February, 2021 are as following:-

(in Million Tons)

|             |   Apr. - Jul., 2019 |   Apr. - Jul., 2020 |
|-------------|---------------------|---------------------|
| Production  |               35.15 |               22.16 |
| Consumption |               33.34 |               19.92 |

(in Million Tons)

|             |   Aug., 2019 - Feb., 2020 |   Aug., 2020 - Feb., 2021 |
|-------------|---------------------------|---------------------------|
| Production  |                     60.26 |                     63.27 |
| Consumption |                     60.61 |                     64.16 |

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