Further action is being contemplated on HRC from Japan, Korea, Mexico and Brazil. CR sheet from Russia, Ukraine and Kazakhstan is also likely to come under attack. China consumes over 115 million tonnes of steel and is likely to produce about 106 million tonnes of steel in 1998 against 103 million tonnes in 1997.

It is also planning action against CIS, Korea and Japan. Since it is a large importer, it is holding talks with foreign suppliers from Korea and Japan and requesting them not to sell steel below a certain price to avoid lengthy wrangling over the procedure of levying dumping duties.

The duties in Venezuela will be retroactive and will protect the local industry to a greatextent.

It is, therefore, ironic that Indian steel producers have not been able to convince the ministry of commerce that at this stage Indian steel needs protection. According to press reports, the plea for a provisional dumping duty on CIS material has been rejected by the ministry of commercial and a final hearing will be held on October 8, 1998, to decide the fate of dumping petition. With CIS material exports being restricted through various devices all over the world, India becoming the major destination for its products cannot be ruled out.

A study of CIS steel shows that it can survive only through exports. CIS had 145 million tonnes of raw steel capacity in 1997 of which 75 million tpy was in Russia and 58 million tpy in Ukraine. Production of raw steel in 1997 was 80.2 million tonnes.

Production of steel in 1997 fell by 1.9 per cent. The fall in percentage terms was 8 in 1991, 18 in 1992, 14.1 in 1993, 20.9 in 1994 and 3 in 1995. Further fall in production in CIS steel is now prevented byincreasing exports as the CIS steel's domestic demand has fallen steeply.

In 1997, Russia and Ukraine consumed only about 35 to 40 per cent of the steel they produced. During the period 1991-1997 the domestic consumption of steel in Russia fell from 56.7 million tonnes to only 15.4 million tonnes. Per capita consumption was less than 100 kgs. Exports alone have propped up the steel and kept it going. In 1997 exports of the Russian steel industry were 65 per cent of its production. Russia has become the world's largest net exporter of steel. Russia earns $6.4 billion through exports of iron and steel--10 per cent of its export earnings. Nearly 12 million tonnes of CIS steel found its way to China and South East Asia in 1996 at prices much lower than world prices.

Locally, over 75 per cent of the steel trade is conducted through barter. When LN Mittal took over the steel mill in Kazakhstan, he found the entire steel trade was in barter. There is no reliable cost data and half the industry is closed andrest can survive only by killing other steel producers all over the world.

In the European Union, where most of the CIS exports should go, HRC exports would be only around 450,000 tonnes per annum, other flat products around 60,000 tonnes per year, and long products 150,000 tonnes. So the 40 million tonnes of exports from Russia and Ukraine have to go elsewhere.

Meanwhile, the EU will supply technology and finance to upgrade the CIS steel industry. Even the US steel industry has complained against the EU policy but the ministry of commerce is the last to be convinced.