Steel companies under intense pressure due to sluggish demand
The ongoing global financial crisis is badly impacting steel companies across the country. They are taking various cost cutting measures to cover their losses. Major steel companies such as JSW, Essar and Ispat Industries have already cut down their production due to steep decline in demand across various sectors.
CFO of JSW Steel, Sheshagiri Rao said that steel industry is dealing with low demand by announcing production cuts. He however said that that the situation would soon become normal.
Steel companies are engaging sell out inventory following fear of further decline in prices amid global financial crisis.
Sajjan Jindal of JSW Steel said that the company would reduce production by around 20 per cent from November. Similar sentiments were also expressed by Mittal- Ruia's promoted Essar Steel and Vinod led Ispat Industries, saying that they have already cut production and are operating at about 75 per cent of their capacities.
Government has taken various measures, like export tax exemption and DEPB or export benefits to help steel companies. Steel industry demanded ten per cent import duty to make steel imports expensive.