The Federation of Indian Mineral Industries (FIMI), the apex body for domestic miners, has sought the urgent intervention of Indian prime minister Narendra Modi seeking the introduction of a steel price monitoring and regulation scheme for the sale of steel by integrated steel mills, according to a communication from the federation to the prime minister on Monday, August 31.
FIMI in its communication noted that such a price monitoring and regulatory scheme was necessary to ensure that there “is no unreasonable hike in domestic steel price due to any increase in the international price of iron ore, since integrated steel mills have their own captive iron ore mines and are not dependent on imported iron ore.”
“Having secured sufficient raw material supplies from auction of iron ore mines, integrated steel mills are now taking the plea of high international prices of iron ore to hike domestic steel prices. This despite the fact that 162 million mt of iron ore with mainly 58 percent to 62 percent Fe content is lying unused in the country,” FIMI said in its communication.
“While the domestic steel industry advocates trade barriers in form of export duties on iron ore to squeeze the mining industry, it advocates a free market for domestic steel sale prices at a par with international prices. Consequently, the high price of steel in India has deprived domestic consumers of common usage of steel and is the prime reason for the low capita steel consumption of 24 kg in India compared to the global per capita consumption average of 208 kg,” FIMI said.
“The hypocrisy of integrated steel players is clearly observed from the fact that they clamor for sale of steel at a par with international prices, whereas they enjoy undue protection from international competition through several measures like import duty on finished steel, antidumping duty and countervailing duty,” FIMI said.
FIMI claimed that protectionist measures for integrated steel mills are enabling them to make windfall profits, artificially inflating steel prices, resulting in high cost of infrastructure and construction costs for projects both in the government and private sectors.