The industrial body IPMA calls for government intervention to regulate the rise in steel prices
The Indian Pipe Manufacturers’ Association (IPMA) has called for government intervention to regulate steel prices, which are trading at an all time high in India. In a letter to Union Steel Minister Dharmendra Pradhan, the body also called for a temporary ban on its exports, a measure that will prevent steel players from diverting their products to international markets.
“Pipe manufacturers and MSMEs have been struggling for a long time due to rising prices and the shortage of steel in the domestic market. We contacted your office (of the Minister of Steel) to ask for your kind intervention to regulate prices and impose a temporary ban on steel exports, ”the letter dated May 20, 2021 reads.
The association said it also marked a copy of the letter to the offices of Prime Minister Narendra Modi, Minister of Trade and Industry Piyush Goyal, CEO of NITI Aayog Amitabh Kant, Secretary of Commerce Anup Wadhawan. , Secretary of the Department for Promotion of Industry and Internal Trade Guruprasad Mohapatra and Secretary of Steel Pradip Kumar Tripathi to brief them on these issues.
The IPMA said steel prices have risen by more than 60 percent in the past 10 months and are expected to rise a further 4,000 rupees / tonne in the coming days. This has made it impossible for downstream industries to exist which are totally dependent on integrated steel mills for their raw material needs, he added. Several downstream industries have closed and many more are on the verge of closure, according to IPMA.
Oil and gas and large infrastructure projects are responsible for economic growth and require good quality steel and its products, according to the agency. However, due to the increase in the price of raw materials, the cost of infrastructure projects has increased by more than 100 to 150 percent. This poses a great risk to our country’s infrastructure vision, he said.
An IPMA spokesperson said steel prices have been very volatile for the past 7-8 months. In some cases, such as API (oil and gas lines) classes, prices have risen over 100-125% from where they were a few months ago. The commercial quality itself has gone from 37,500 rupees per tonne to current levels close to 70,000 rupees per tonne and still rising, he said.
“This has seriously affected our project-based business which requires some validity. Primary steelmakers don’t give any validity for more than a few days because they want to cash in on upward price trends causing huge spreads and the resulting losses due to the volatility of steel, ”he said. the spokesperson told PTI by phone.
This has put most of the pipeline laying and construction activity on a slow backdrop, reversing government pressure for faster infrastructure development, he said. In the domestic market, steel is trading at an all time high. In May 2021, Indian steel players increased the prices of hot-rolled coils (HRC) from Rs 4,000 to Rs 67,000 and cold-rolled coils (CRC) from Rs 4,500 to Rs 80,000 per tonne. tonne.
While in the United States the price is around $ 1,500 per tonne, in Europe it is close to $ 1,000 per tonne.