NC Mathur, President of the Indian Stainless Steel Development Association (ISSDA) informed that capacity utilisation by domestic stainless steelmakers declined because of poor demand, cheap imports and high raw material price.
According to Mathur, domestic players reduced operating capacity by 20 percentage points so far this year. Thus, these players are operating at 45-50 per cent of installed capacity compared to 55-60 per cent until last year.
One of the reasons mentioned for the decline in capacity utilisation is cheap dumping of various stainless steel products from China, Taiwan and Korea. This made production from domestic sources economically unviable.
The industry, with large players such as Salem Steel Plant, Jindal Stainless and DRG has created around 5 million tonne (mn t) 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 mn t. Last year, total production in India was around 2 mn t.
So far this year, the price of ferro chrome, the only raw material for producing stainless steel, climbed an average 15 per cent.
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