To maintain capacity utilization levels, exports are necessary for Indian steel companies expanding their capacities, as demand is not directly proportional to output levels, ArcelorMittal Nippon Steel Limited (AMNS) chief executive officer, Dilip Oommen said in a statement on Monday, October 31.
“Since expansion happens, there will be a certain stage where you necessarily have to export if we have to ensure high capacity utilization levels,” he said.
Though he did not specifically mention the recently imposed 15 percent export tax on steel from the country, his statement comes in the wake of AMNS commencing its $7.31 billion expansion of its Hazira steel mill to 15 million mt per year, from 9 million mt per year at present.
Oommen said that, while the Hazira steel mill will add another 6 million mt, one cannot expect to suddenly increase market share and hence they will need to sell overseas and so they expect the government “to take care of the export duty”.
Oommen is also the president of the Indian Steel Association, the industry representative body, which has submitted several presentations before the ministries of steel and finance seeking the scrapping of the 15 percent export tax.