Indian Steel Alliance agrees to stop exports

Indian Steel Alliance (ISA), an organization of key primary steel producers in India, has agreed to halt steel exports with immediate effect to ensure domestic supplies. ISA members include Steel Authority of India, Essar Steel, JSW Steel, Ispat Industries and Jindal Steel & Power. Tata Steel is not a member of ISA. Similarly, Cold Rolled Steel Manufacturers Association (CORSMA) is also not a part of the statement made by ISA.

However halting exports may not bring in great supplies in the domestic market, but will, in turn, is an indirect move to reduce domestic prices. As halting exports is a voluntary measure and does not tantamount to a ban, all existing orders will be honored but fresh exports will be restrained. Further, long-term contracts and export commitments against machinery imported under the EPCG scheme will be met.

With brownfield expansions yet to be commissioned and greenfield projects yet to take off, the demand-supply situation has worsened, and India has turned net importer of steel during the recent quarters. The move by ISA will give much needed respite to the domestic steel users. The immediate effect of this move is that steel prices in Gobindgadh Punjab has come down by 1000 -2,000 per metric ton (MT). The prices of ingot have come down to Rs 38,500 per MT from Rs 39,800 per MT within a day. Similarly, the rates of Round (Saria) have fallen down to Rs 43,000 per MT from Rs 45,000 per MT.