Steel Users Cry Foul as Steel Prices Hit the Roof in India
Reports have started to emerge in Indian media about the plight of steel users, especially small & medium industry, exporters & on going infrastructure projects, due to unprecedented hike in steel prices since July 2020. Confederation of Real Estate Developers Association of India TN chapter chairman Mr S Sridharan told Express that this price hike may force developers to slow down projects. He said “The TMT steel prices have increased to nearly 25 per cent in just 45 days. The price hike and delayed delivery of the steel severely affect progress of highway projects.”
Karnataka Small Scale Industries Association, representing Micro, Small and Medium Enterprises, has urged the government to subsidise the steel prices or impose price control. KASSIA President Mr KB Arasappa said “This sudden spike in prices has made it impossible for MSMEs to meet confirmed orders and they are in serious danger of losing exports markets to competitors. This has come up on them as though the COVID-related disruptions were not bad enough. KASSIA would like to urge the government to urgently intervene in the matter so that the steel consuming small industries are saved from closure.”
The minister for MSMEs and highways Mr Nitin Gadkari also came down heavily on steel and cement industries for jacking up prices, without valid reasons. Stating that these two industries appeared to take unfair advantage of the government’s initiatives to help businesses, Mr Gadkari wondered what prompted steel firms to raise prices by 55% in the last six months. He indicated that commensurate increases were absent in the price of key inputs like power and raw materials. The minister, however, said that there is nothing wrong for a business person to earn profit, that is fundamental right & companies are not in the business for charity, but there have to be reasons for raising prices.
After the twp price hikes in December, the prices of benchmark rebar & HRC have surged to INR 48,500 & INR 49,000 per tonne landed without GST, up by more than 35% since last lows of about INR 36,000 in July 2020 beginning.