ET reported that Indian steel industry could likely see an impact on one part, mainly on the long steel segment, which has products used in the construction industry.
According to Mr Sushim Banerjee ED commercial of Steel Authority of India, the financial crisis in Dubai could further delay construction activity, which had come to a halt since early 2008 after a crash in property prices.
Mr Banerjee said that “Dubai is not a large market as far as exports are concerned. But steel companies do supply construction grade steel in Dubai through construction majors like L&T and BHEL. The financial problems in Dubai may have some impact on future steel purchases.”
Some of the other sectors of the steel industry that could likely be affected is the line pipe industry, which makes pipes for transportation of oil from refinery to consuming centres. Since the pipes have to be technically precise, many Indian companies have service centres near to their customers so that the cost of shipping the large pipes is reduced.
The line pipe making companies include Man Industries, PSL, Welspun Gujarat Stahl Rohren and Jindal Saw.
Mr Anil Surekha director (finance) of Ispat Industries said that “Steel supply to Dubai had anyway dropped in the last few months due to an overall slump in the real estate market.” He added that “We don’t see a huge impact in the long term. The world won’t let Dubai economy sink and we expect some aggressive measures soon.”
(Sourced from Economic Times)
Monday, November 30, 2009
Indian steel industry likely to hit by Dubai crisis
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