Stakeholders urge steel industry against price hike

April 2nd, 2008 - 11:44 pm ICT by admin  

Chennai, April 2 (IANS) Representatives of the forging and construction industries and small and medium sized units Wednesday urged steel manufacturers not to resort to steep price hikes. “All the steel manufacturers are increasing their product prices in tandem despite their production cost remaining the same. It is time the central government brings in a regulator for the steel sector,” Vidyashankar Krishnan, president of the Association of Indian Forging Industry (AIFI) and managing director of M.M. Forgings Ltd, told reporters.

“Just two months ago steel was available for Rs.28,000 per tonne and now it is Rs.40,000. The price of carbon steel used by the forging industry has more than doubled to Rs.58,000 in a short time,” he added.

India would not be a hub for auto components if steel prices are not reined in, he said, adding that automobile manufacturers had started importing components from China as it is cheaper for them than sourcing from India.

Steel accounts for nearly 60 percent of a forging cost and 50 percent for a casting.

“The price of pig iron and coke iron has gone up by 46 percent and 42 percent respectively since August 2007. Similarly the price of scrap iron has gone up by 47 percent and it is on the rise despite the central government abolishing the import duty on it,” complained V. Mahadevan, president, Indian Institute of Foundry Men and managing director, Hinduja Foundries Ltd.

Exports of forgings constitute around 15 percent of the industry’s production.

In 2006-07, exports of the forging industry recorded a growth of 23 percent to $360 million and further to $430 million in the last fiscal.

According to A. Shanmugavelayuthan, president of the Tamil Nadu Small and Tiny Industries Association (Tanstia), many small units are on the verge of closing down because of the unprecedented rise in steel prices.

Industry representatives, speaking at a meet, said Indian steel manufacturers had formed a cartel and were increasing the prices in tandem.

“One should investigate the reasons for the steel price increase after the union budget. The government should allow duty-free import of cement and ban export of iron ore,” said J.R. Sethuramalingam, chairman of the Builders Association of India (Tamil Nadu and Pondicherry chapters).

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