The April-December growth in export of saleable steel stood at only 2.5 per cent, year on year. In addition, the country shipped out another 1.83 lakh tonnes of pig iron, according to estimates of the Joint Plant Committee.

These figures do not take into account exports of alloy and stainless steel as also pipes and tubes. Although an accurate estimate is not available for the latest period, exports of these products have been substantial. The comfort, therefore, as expected, did not last long. In fact, much of the reported volume was shipped out in the early months of the year and before October. With the global steel market not looking up there are sure signs of trouble for the steel makers in the coming months. There is hardly any buying support in the market at present. But, will it remain that way for long? There are two major factors that will stand against the steel makers efforts to boost exports.One, the world market has seen a near total collapse in the second half of the year. Worst hit are the prices of flats: HR coils, CR sheets and galvanised sheets, mainly. The HR coils prices, for example, have declined from $310-330 per tonne in April to $175-180, that too for products from the first class mills around theworld. The Ukrainian offers are at around $140 or less with those from Russia placed marginally higher at $145-150.

The Japanese steel makers tried to hold out for quite some time but ultimately were forced to give in, dropping their prices to $210-220. The Latin American mills, faced with a slowdown in their economies and with high rates of production are now finding the going tough and are accepting the global price line. Some of their deals have been reported to be in the range of $160 per tonne (FoB).These prices are nevertheless unattractive for the Indian steel makers.

Therefore, unless compelled to, they would perhaps stay away from exports to the extent possible.

The long products market has never been any good in the recent past. The prices have remained so low that in many cases there is no scope for a drop from the level now. After a brief period of stability, the pig iron prices have fallen once again. In view of this, the Indian producers will find the prices of pig iron, semis or finished steel, unattractive. There is another problem. Accepting a low price in global competition is something avoidable not because the company exporting it does not make money on these prices or the company does not have the requisite financial prowess to hold out longer in a weak market.

It may invite more trouble on a later date with the threat of trade actions looming large on most exports, especially on flat products. Indian steel makers have already had a big dose of it. They are already facing anti-dumping and countervailing actions in the European Union on both plates and HR coils, among major products.

Canada is also not lagging behind and has already slapped a duty on Indian plates. They have opened up cases on Indian producers on HR coils and galvanised products also.

They are up against similar action in the USA on plates. Wire rods and pipes are covered under safeguard actions by Washington. An anti-dumping and countervailing petition against Indian companies is under investigation in that country. There are reports of Mexican steel mills preparing to file an anti-dumping suit against Indian plates. This, more or less, completes the story. With so many trade actions, prevailing and anticipated, exports from India will certainly be affected.But this is not to say that the country's export avenues will be totally sealed. After all, over 270 million tonnes of steel is traded internationally and if one excludes intra-zone volumes (that is, intra-EU), there are still about 150 million tonnes to be traded across the blue waters.

The Indian companies will have to go for fresh marketing efforts. Even if they do not get the prices, which are naturally global market-driven, there are countries, small in comparison as buyers, where threats of trade actions are absent. The Indian companies should now go for value-added products to the extent possible, especially in flats, to avoid trade actions. For example, it may be worthwhile trying to export coated sheets, cold-rolled sheets and pipes and tubes, instead of putting all efforts on HR coils.

There will definitely be constraints faced in it on account of inadequate domestic capability and lack of economies of scale as the markets for these products lie scattered all over. But, in the longer run it will pay.

It is true that by lowering prices, one can still sell most of what one wants to sell. But, with these cases on, the industry will lose more attractive avenues. Also, such a strategy is neither financially sound nor prudent considering the industry's longer-term interests. Desperate pricing exposes the producers to the new risks of trade actions. Today's gains may prove bigger losses tomorrow. Therefore, there are limits to which the Indian companies will be able to leverage prices to retain their share in the world market.

(The author is associated with the Steel Exporters' Forum. The views expressed above are his own and not of the forum)