Activities

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:

 
  Problems Suggestions
A) Availability  
  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. 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.
B) Pricing  
  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.
C) SSI Units  
  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. 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.
  Shortage of Wire Rods Solutions
  Some Mills of the Steel Plants produce mixgrade wire rods as well as constructiongrade 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:

 
Problems Suggestions
DEPB benefits applicable to steel wires of all types have been suspended, along with basic steel items, with effect from 27thMarch, 2004. The DEPB benefit Suspension should be withdrawn immediately for solving the crisis in the Steel Wire Industry.
The relevant DEPB Serial Nos. are 341, 344, 348.The referred Suspension is having extreme adverse impact on exports of steel wires. In this context, it may be noted that steel wires are not steel items but are well-recognized engineering products.
 

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:

<p=”msobodytextindent”>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 inSWMAI 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.

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 asdeemed 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.”

b) Recent Activities: