To maintain higher capacity utilisation, exports are necessary for local steel players expanding their capacities, as demand is not directly proportional to production, according to a top industry executive.
"Since expansion happens... there will be a certain stage where you necessarily will have to export, if we have to be on high capacity utilisation," Dilip Oommen, CEO of ArcelorMittal Nippon Steel (AMNS) India told PTI.
His comments assume significance as steel players are looking up to the government for relief in the form of roll back of the duties levied on steel exports.
On May 21, the government hiked the duty on exports of iron ore by up to 50 per cent and for a few steel intermediaries to 15 per cent.
In line with the government's 300 MT steel making capacity target, other steel players like Tata Steel, JSW Steel, SAIL and JSPL are also expanding their capacities to meet the goal.
AMNS India on Friday commenced a Rs 60,000-crore expansion project to scale up its Hazira plant capacity to 15 million tonne (MT) from 9 MT at present.
The project will add another 6 MT capacity and suddenly one can not increase its market share proportionally, the CEO said.
"Till then you need to export. I imagine the government of India will take care of the export duty on steel," Oommen, who is also the President of the apex Indian Steel Association (ISA), said.