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Industry Body IPMA Seeks Govt Intervention To Regulate Rising Steel Prices
Oil and gas projects and major infrastructure projects are responsible for driving economic growth, and require fine quality steel and its products, according to the body.
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Industry body Indian Pipe Manufacturers' Association (IPMA) has sought government intervention to regulate the prices of steel, which are trading at an all-time high in India.
In a letter to Union Steel Minister Dharmendra Pradhan, the body has also sought a temporary ban on its export, a move which will prevent steel players from diverting their produce to the international 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 said.
The association said it has also marked a copy of the letter to the offices of 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, to apprise them about such issues.
IPMA said steel prices have increased more than 60 per cent in the past 10 months and are expected to increase further by Rs 4000/ a tonne in coming days. This has made existence for down-stream industries impossible who are totally dependent on integrated steel mills for their raw material requirement, it added.
Several down-stream industries have closed and many more are on the brink of closure, IPMA claimed.
Oil and gas projects and major infrastructure projects are responsible for driving economic growth, and require fine quality steel and its products, according to the body. However, due to the increase in price of raw materials, the cost of infrastructure projects has gone up by more than 100–150 per cent. This is posing a great risk to the infrastructure vision of our country, it said.
A spokesperson of the IPMA said steel prices have been highly volatile since the last 7-8 months. In some cases like API grades (Oil & Gas lines) prices have gone up by over 100-125 per cent than what it was a few months back.
Commercial grade itself has moved from being around Rs 37500 per MT to current levels close to Rs 70,000 per MT and still on the rise, he said.
'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 has put most of the pipe laying and construction business on a slow burner thereby negating the government's push for faster infrastructure development, he said.
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. While in the US, the price is at about USD 1,500 a tonne, in Europe it's close to 1,000 euros per tonne.