The industry, with large players such as Salem Steel Plant, Jindal Stainless and DRG has created around five million tonnes of production capacity. But due to poor demand from domestic infrastructure and the kitchenware segment, total output of both the 400 series for industrial applications and 200-300 series utensil making is set to be at 2.5 mt. Last year, total production in India was around two mt.'This means 45 per cent of installed capacity remained idle. In contrast, cheap dumping of various stainless steel products from China, Taiwan and Korea continued, which has made production from domestic sources economically unviable,' said N C Mathur, president, the Indian Stainless Steel Development Association.
The price of ferro chrome, the only raw material for producing stainless steel, has risen at an average by 15 per cent so far this year. Another ingredient, electricity, has b'e equally costlier. Rising imports at cheaper rates than the cost of domestic production have made business tough for producers. According to a leading player, Indian producers have been incurring a loss of around 10 per cent of the stainless steel price.'The whole industry is under severe stress. The industry has borrowed around Rs 20,000 crore from banks and financial institutions. Servicing of this debt has b'e difficult now,' said Mathur.
The scenario is equally critical for ferro chrome producers, said Subhrakant Panda, managing director, Indian Metals and Ferro Alloys Ltd, and president of the International Chromium Development Association.China has snapped the leading position from South Africa in terms of ferro chrome production, resulting in higher stainless steel output. High carbon ferro chrome output during 2012 reached 8.95 mt with China securing the prime position by producing 3.1 mt. While overall production has remained stagnant since 2010, there have been interchanges with China making up for lower production in South Africa. Indian output, meanwhile, has flirted with the one mt mark.
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