Only MIP won’t do any good to the steel sector; all eyes set on Union Budget

The Indian steel industry, which is not seeing its days of glory as of now, found a ray of support when the government recently announced the minimum import price (MIP) on 173 steel products ranging between USD 341-752 per tonne.

While the industry is going through the toughest phase that one can recall in the recent past, India has still grown positively in steel consumption, and remains the only major emerging economy to do so.

However, the industry players have come under extreme pressure because of huge losses that they have faced owing to the declining demand of steel in the country. Not only this, even the export scene is not phasing out very well because international markets have surplus capacities, because of which major international players like Japan, South Korea, China, Turkey and Brazil are selling steel even below their marginal cost, leading to a global crisis in the industry.

If that continues to be the case, the steel industry, which is already under heavy loans despite not having made much profit will continue to deteriorate, which is why all eyes are set on the Union Budget 2016-17 that comes later this month.

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