Southern India’s smaller downstream firms hit hard by rising steel prices

Tuesday, 24 November 2020 15:34:24 (GMT+3)   |   Kolkata

Steel consuming, micro, small and medium-scale enterprises (MSMEs) in southern India have claimed that “they would cease to exist” in the face of rising prices of steel and allied raw materials, an industry representative association has said in a petition to the Indian government.

 “MSMEs are not able to execute orders based on accepted earlier prices. Industries will cease to exist if increasing prices of raw materials like steel is not corrected. The additional 20 percent bank loans sanctioned by banks to MSMEs through emergency credit lines have been completely exhausted in absorbing input cost increases,” the Coimbatore District Small Scale Industries Association said in a communication to government ministries including finance, steel and commerce.

“Even as business is returning to normal, prices of allied foundry materials like pig iron, cast iron, scrap and coke have increased 30-35 percent since the national lockdown earlier in the year. This has affected production costs of engineering products, rendering exports uncompetitive,” the association said.

The association is seeking immediate intervention of the government to ensure supplies of steel to MSMEs at subsidized prices and also the re-opening of the Coimbatore stockyard of Steel Authority of India Limited (SAIL), as the sourcing of steel from dealers and stockists entailed the additional cost of premiums charged by the latter.

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