Steel Prices

Industry Body IPMA (Indian Pipe Manufacturers’ Association) has reached out to the government and sought intervention to regulate the steel prices, which are trading at an all-time high in India. In a letter to the Union Steel Minister, Dharmendra Pradhan, the Industry body has also requested a short-term ban on its exports. This temporary ban will be effective in preventing steel players from diverting their production to global markets.

“Pipe manufacturers and MSMEs are struggling for a long time due to increased prices and shortage of steel in the domestic market. We had approached your (Steel Minister) office, requesting your kind intervention for regulating prices and imposing a temporary ban on steel export,” the letter dated May 20, 2021 read.

The association mentioned that it has also delivered a copy of the letter to major government offices which includes Prime Minister Narendra Modi, Minister of Commerce and Industry Piyush Goyal, NITI Aayog CEO Amitabh Kant, Commerce Secretary Anup Wadhawan, Secretary Department for Promotion of Industry and Internal Trade Guruprasad Mohapatra and Steel Secretary Pradip Kumar Tripathi, in order to brief them about the issue.

According to IPMA, steel prices have witnessed an increase of 60% in the last 10 months and are expected to increase further by Rs 4000 a tonne in upcoming days. Down-stream industries are totally dependent on integrated steel-mills for their raw material procurement. And as per IPMA, this increase in price has made their existence impossible. They claimed that several down-stream industries have shut down and many are on the verge of closure due to this problem.

Oil & Gas and major infrastructure projects are the major contributing factors to the economic growth, and requires fine quality steel and its products, according to the body. Nonetheless, due this exponential increase in price of raw materials, the cost of infrastructure projects has sky rocketed. It has gone up by 100-150 per cent that poses a risk to the infrastructural vision of our country.

An IPMA spokesperson said that since the last 7-8 months steel prices have highly volatile.

“This has severely impacted our project-based business which needs a certain validity. The primary steel manufacturers don’t give any validity more than a few days as they want to encash on the rising price trends thereby causing huge gaps and the resultant losses on account of steel volatility,” the spokesperson told PTI over phone.This phenomenon has put most of the pipe laying and construction businesses on slow burner, and its acting in an opposite direction to the government’s force of faster infrastructural development, said the spokesperson.

In the domestic market, steel is trading at an all time high. In May 2021, the Indian steel players shot up prices of Hot Rolled Coil (HRC) by Rs 4,000 to Rs 67,000 per tonne and Cold Rolled Coil (CRC) by Rs 4,500 to Rs 80,000 per tonne.Whereas in US, the price is around USD 1500 a tonne and in Europe it’s somewhere near 1,000 Euros a tonne.

Emad Masroor

By Emad Masroor

Emad Masroor is a student of Business Management. Primarily, he writes pieces on Global Politics, Business Trends, and Technology.

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