a) Previous Activities:
A) Wire Rods:
After sincere and conscientious
efforts of SWMAI, availability of Wire Rods is no more an issue for the
industry. SWMAI has all along negotiated with the concerned authorities
and with the integrated Wire Rod producers to maintain the adequacy in supply of
MS and HC wire rods.
In this connection, mention
should be made that SWMAI has attended the Meeting of the National
Steel Consumers’ Council on 12th June 2004, at New
Delhi and the following Problems and Suggestions, regarding Wire Rod
availability and Pricing, had been made by SWMAI at the meeting:
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Problems
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Suggestions |
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A) |
Availability |
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Serious shortage of wire rods, particularly in the
value added grades, viz., high carbon, has become a matter of grave concern
to the Steel Wire Industry.
Availability from the two major sources, namely, i)
Rashtriya Ispat Nigam Ltd. (RINL) and ii) The Tata Iron & Steel Company Ltd.
(TISCO), is inadequate for meeting the demand of the infrastructure projects
of Government of India, requirements of Railway Tracks/Concrete Sleepers
etc. There is no other source of supplies at present.
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The quantity of high carbon wire rods to be produced
per month by RINL and TISCO should be doubled as compared to the present
production for meeting the vital requirements of the Economy, as long term
solution.
For the short-term solution, Customs Duty on Wire
Rods should be reduced to 5% for improving the global accessing and
increasing availability of wire rods from imports. Wire rods should be put
under raw materials category for actual users, as in the case of scrap.
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B) |
Pricing |
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Prices of mild steel and high carbon wire rods are
being changed frequently, practically every month, creating serious problems
to the Steel Wire Industry, which has to supply essential steel wire to
Government Projects on firm prices for long periods of 6 to 12 months. |
1) The
prices should be fixed by the Integrated Steel Plants for a minimum period
of 3 months. It is better to ceclare quarterly prices for the 4 quarters in
the year, i.e., April-June; July-September; October-December and
January-March.
2) Against
Government supply of wire, the raw materials, i.e., wire rods should be
available at fixed price for the term of tender.
In customs tariff wire
rods and wires should be separatelyified.
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C) |
SSI Units |
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We learn that SSI Units will be given wire rods through SSI Corporations
by the Steel Plants. Currently, as far as wire rods are concerned, the Wire
Drawing Units are taking materials from the Main Producers directly through
short term and long term contracts. The routing through SSI Corporations,
will add to the cost.
Shortage of wire rods.
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Most of the State SSI Corporations are not functioning; hence, the
consuers should be allowed to procure directly from the Plants. Hoever,
priority should be given to the actual users against the actual user’s
certificate/declaration.
Availability of wire rods to SSI Units can be increased by augmenting
their shares vis-à-vis shares of others.
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Shortage of Wire Rods |
Solutions |
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Some Mills of the Steel Plants produce
mix
grade wire rods as well as construction
grade steel bars. |
Since for construction grade steel bars, there
various secondary sources, prime wire rod producers should increase the
share of wire rods rolled in their mills. |
SWMAI had taken up the initiative to communicate with the integrated
Wire Rod producers to ensure quick corrections to the domestic wire rod prices
in line with international prices, especially in MS & other commodity HC grades.
B) Drawing of Wire from Wire Rods:
Excisability Status
After a
pain-stacking effort of SWMAI, the grave crisis in the Steel Wire
Industry is likely to be resolved in view of the introduction of The Taxation
Laws (Amendment) Bill 2005 in the Lok Sabha.
C) Export – Import Policy
Vide Public notice dated 28th
February, 2004, DEPB benefits applicable to Steel Wires of all types had been
suspended with effect from 27th March, 2004.
The suspension of DEPB benefits
had very strong negative impact on exports of steel wires.
SWMAI took up the problem
directly with concerned authorities viz., Ministry of Finance, Department of
Revenue, Ministry of Commerce, Ministry of Steel etc., and through the
National Steel Consumers’ Council. SWMAI had pointed out the following
problems and suggestions:
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Problems
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Suggestions
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DEPB benefits applicable to steel wires of all types
have been suspended, along with basic steel items, with effect from 27th
March, 2004.
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The DEPB benefit Suspension should be withdrawn
immediately for solving the crisis in the Steel Wire Industry. |
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The relevant DEPB Serial Nos. are 341, 344, 348.
The referred Suspension is having extreme adverse
impact on exports of steel wires.
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In this context, it may be noted that steel wires are
not steel items but are well-recognized engineering products.
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As a result of the continuous
efforts of the Association, the DEPB benefits on steel wire exports has been
restored with effect from 12th July, 2004.
D) Imports of Steel Wires
and Wire Ropes: Imposition of Tariff and Non-Tariff Barriers
The Steel Wire Industry in India
is getting adversely affected due to cheaper imports of ACSR core and PC wires
from some countries. SWMAI has taken up initiatives and is working on the
demand for imposition of different tariff and non-tariff barriers to protect the
domestic Wire and Wire Rope Industry.
E) International
Association of Wire and Cable Industry Council
In 2004, Steel Wire
Manufacturers Association of India has joined International Association
of Wire and Cable Industry Council, which is now the apex international body
for the Wire Industry, as an Associate Member apart from about seven
other Country Associations.
F) Computerization of
SWMAI Activities:
With
the aim to make the Association’s entire functioning and communication system
totally mechanized with minimal or zero paper work to make the SWMAI at
par with A+++ standard of International efficiency, drastic changes have been
made in SWMAI functioning, since early 2005, with the introduction of
Computer and Internet System. Staff has been recruited for efficient functioning
of the SWMAI Secretariat.
G) Dissemination of
Information:
During 2004-05,
SWMAI Secretariat issued more than 700 Circulars to apprise the members
of the latest developments taking place in various areas concerning the Steel
Wire and Wire Rope Industry. Being a service organization, SWMAI has all
along laid emphasis on prompt dissemination of information/ data for the benefit
of members.
b) Recent Activities:
SWMAI
attended the 20th Meeting of the National Steel Consumer Council
on 30th June 2006, held at Vigyan Bhawan, New Delhi, under the
auspices of Ministry of Steel, Govt. of India.
The Association
was represented by Mr. Mahesh Poddar, Chairman and Mr. Avinash
Aradhya, Member, Executive Council.
SWMAI
had put forward the following proposals, in the meeting, basically for the
improvement of raw materials supply situation in the Country:
“The current
state of the Indian Economy has developed a good potential for the Steel Wire
industry to grow. Fast-growing infrastructure sectors like Telecommunications,
Power, Road Transport and Railways have revealed some good prospect for the
Steel Wire Industry.
At this
juncture, Steel Wire Manufacturers Association of India (SWMAI) - the
apex National Body of Steel Wire & Wire Rope Manufacturers, on behalf of the
Industry, strongly urges Govt. interventions on the issues of adequate
supply of raw materials (Wire Rod) of value added grades, like High Carbon Wire
Rods, and its price stability.
1)
Availability of Wire Rods:
a)
High Carbon Wire Rods:
i)
Inadequate supply of High Carbon (HC) Wire Rods of proper quality and
chemistry, have become a matter of grave concern to the Steel Wire Industry.
Availability of HC Wire Rods from only two sources,
i.e., RINL and TISCO, is inadequate to cater the demand of the Steel Wire
Industry. Therefore, RINL and TISCO should increase the share of HC Wire
Rods rolled in their mills.
ii)
Capacity expansion of RINL would give fillip to the Industry but
there would be a time factor for that and, therefore, for the interim period,
Govt. should adopt some short-term policies like reduction of Customs duty on HC
Wire Rods for improving the global accessing and increasing availability of HC
Wire Rods from imports.
b)
New Stockyards of RINL should be established at different places for
better raw material availability:
Road Transport is becoming
costlier day-by-day. Therefore, RINL should open stockyards at new
places, according to the consumers’ location, for better and easier availability
of raw materials to the manufacturers. States like Jharkhand has no RINL-stockyard
though there has a good demand for raw materials and hence, the manufacturers at
Jharkhand are being deprived of getting raw materials from RINL. For the
interim arrangement, RINL may use their nearest stockyards as hubs and
supply raw materials from that hubs to the locations having high consumer
density.
2)
Prices of Wire Rods:
a)
Availability of Wire Rods at International Prices through Deemed
Export:
Indian Steel Wire Industry has
the capability to earn a handsome amount of foreign money by exporting quality
grade products, produced through necessary value additions on steel. It would be
possible only when the domestic wire manufacturers could get raw materials at
International prices. Most of time, domestic wire rod prices are higher than
International prices. Therefore, SWMAI strongly demands that for export
of wire, domestic steel manufacturers should supply wire rods to the domestic
wire manufacturers at the steel manufacturers’ export prices (FOB) and this may
be treated as deemed export. This would enable domestic steel wire
manufacturers to make necessary value additions and increase the export
potentiality of the Industry.
b)
Fixed Prices of Wire Rods for supply of wire to the Govt. Projects:
Keeping in view of the cyclical
price trends in the steel sector, SWMAI strongly recommends some policy
implementations for the price rigidity for some predefined period, say, for a
quarter. Prices of mild steel and high carbon wire rods are being changed
frequently, practically every month, creating serious problems to the Steel Wire
Industry, which has to supply steel wire to Government Projects on firm prices
for long periods of 6 to 12 months.
Therefore, we suggest, steel
manufacturers, on the similar basis, can enter into an agreement with the steel
wire manufacturers to supply fixed quantities of raw materials to the wire
manufacturers at firm prices to enable them to fulfill the Government’s
requirement of wires at firm prices.
c)
Lower Prices of Wire Rods for increased consumption of Steel Wires:
Prices of Steel items should
also be kept as low as possible, for the benefit of entire steel industry.
Because, as price of steel increases, there would be a clear switchover of
consumption from steel to Aluminium and its alloy products. This happens in
Steel Wire industry also. In case of ACSR Conductors, there are two distinct
types – 1) Steel Conductors and 2) Aluminium Clad Conductors. As price of Steel
increases, there would be a consumption switchover from Steel to Aluminium Clad
Conductors.
To check the domestic prices,
Govt. should consider import of Wire Rods, which is raw material to the wire
manufacturers (similar to scrap for re-rolling mills), at 0% duty.
3)
Other issues of concern:
a)
Low cost imports of steel wires from China & other countries:
Government policies like Free
Trade Policy with ASEAN Countries; Japan etc. are definite obstacle to the
growth of domestic Steel Wire industry. In particular, low priced import of ACSR
and PC Wires from China is a matter of grave concern to the Indian Steel Wire
Industry. MFN treaty of Govt. of India with Nepal is supplying a great impetus
to the Chinese trend. Prices offered by those imported wire items are seriously
shocking to the domestic manufactures.
Total quantity of import
of Steel Wire & Wire Rope, during Apr’05 – Mar’06 period, was 39270.06
tonnes (approx.), which was 31616.76 tonnes during the Apr’ 04 –
Mar’05 period. Therefore, there was a 24 per cent increase in imports of wire
and wire ropes. Moreover, imports from China, Indonesia, Malaysia, Thailand,
Sri Lanka and UAE have increased many times. Volume of import from China
has increased from 5463.98 tonnes in 2004-05 to 10389.98 tonnes
(approx.) in 2005-06.
b)
DEPB rates – value cap:
The issue of DEPB rates on
export of wires is another problem to the Indian Steel Wire Industry. The DEPB
Scheme has been extended and Value cap is Rs. 22,000/- for calculation of the
DEPB amount. Whereas, wire rod prices are over Rs 22,000. So, the value cap is
too low. Therefore, keeping in view of domestic steel prices, the value of DEPB
should be revised upward.”
c) Ongoing Projects:
SWMAI
also works as
a supporting Association in organizing various Trade Fairs. Presently, SWMAI
is working with CII, Wire Association International Inc. and the
Telecom Cable Manufacturers Association for the Wire & Cable India
2006 - CII’s International Exhibition & Conference to be held at Mumbai
on 16-18 November 2006. |
