Indian induction arc furnace operators have sought government intervention in controlling spiraling billet prices in the interest of keeping infrastructure cost inflation in check, an official with the All India Induction Furnaces’ Association (AIIFA) said on Wednesday, December 27.
The official said that prices of semi-finished steel products like billets have surged over the past three months, largely owing to higher costs in inputs like sponge iron and scrap faced by induction furnace operators who have had no option but to pass on higher costs to billet consumers.
This in turn will result in higher costs of making angles and structural and thermo-mechanically treated (TMT) bars and such higher costs will impact the infrastructure sector, the official said. He said that the government in the interest of keeping infrastructure costs in check should intervene in keeping input costs of induction furnaces - scrap and sponge iron - in check or at least ensure reduction of volatility in the market.
According to data collated by SteelOrbis, billet prices have surged over the past week, moving up by INR 2,900/mt ($45/mt) to INR 34,500/mt ($539/mt), ex-works, and in response most steel mills have hiked prices of long products by about INR 1,000/mt ($16/mt) ex-works.
The AIIFA said that, unless the government intervenes to check surging prices of steel intermediates, it will have significant cost inflation in government-funded projects like low-cost housing, highway construction and urban underground rail transport systems already under construction in various cities.
