Expressing concern at poor utilisation of capacity of sponge iron units, the manufacturers have demanded 100 per cent hike in import duty on hot briquetted iron and direct reduced iron (HBI/DRI) products.
Right now, the HBI/DRI products attract five per cent which, it is felt, should be hiked to 10 per cent.
The Sponge Iron Manufacturers Association, in a statement, points out that in the first five months of the current fiscal, more than three lakh tonnes of HDI and other DRI products were imported, mainly from West Asian countries having advantage of low production cost due to the local availability of cheap natural gas as source of energy. The import in the previous year (2011) was negligible.
As a result, the capacity utilisation of the sponge iron units dropped to around 20 million tonnes (mt) from more than 23 mt in the previous year. The total capacity is estimated at more than 35 mt.
The sponge iron units, it is further pointed out, have been hit also by high cost of production caused by the shortage of iron ore following the closure of iron ore mines on environment and other reasons.