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Punjab industrialists protest over rising steel prices

BS reported that the recent hike in steel prices has irked the steel industry in Punjab especially the MSME sector which has urged the union government to interfere in the matter.

The industrialists in Punjab condemning the price hike alleged the hike was bane for the MSME sector in Punjab and union government should take necessary steps to protect the industry in this regard

Mr Avtar Singh general secretary of Punjab Chamber of Industrial and Commercial Undertaking has said that during short span of less than two months, Indian steel makers comprising SAIL, Essar, Ispat, TATA, have hiked prices of Steel Products by more than 30%. This hike has given latitude to unauthorized holding and has created artificial scarcity in the domestic market, thereby putting MSME Sector at stake by eating away their sizable working capital funds. Exporters have been hit hard and unable to keep their commitment with foreign buyers.

CICU has appealed to the union government to take appropriate measures to shield MSME Industry from the impact of rising steel prices.

Mr P D Sharma president of Apex Chamber of Commerce and Industry (Punjab) has alleged the hefty rise in steel prices would a heavy toll of industry. He added that MSME sector purchases steel on the basis of spot prices which are usually 60% to 70% higher than the contract prices.

Mr Sharma added "It is ironic that despite India having all the factors of production for steel products like raw materials and labour at a much cheaper price compared to others, the steel users in the country paid over USD 100 per tonne extra compared to global price. This is because our steel producers base their price on import parity basis by adding ocean freight and other margins to the global price. Now with ocean freight increasing, this difference would increase."`

The jump in the steel prices is rooted in the new paradigm for quarterly contracts for iron ore and coking coal. Earlier such contracts were yearly. As per Mr Sharma the steel producers, have their own iron ore mines and the cost of iron ore to them is just nominal and the new paradigm should have no effect on them

He also urged the Union Government to take serious note of this spurt in steel prices.

(Sourced from Business Standard)