Various segments of Indian steel producers and consumers have sought government intervention and even the setting up of an industry regulatory body to check rising costs of inputs, semi-finished and finished steel products, several industry representative bodies said in their representations to the government.
The All India Induction Furnace Association (AIIFA) has sought government intervention to check rising prices of semi-finished products like ingots and billets across markets in the country, pointing out that the spiraling cost of construction grade steel products will negatively impact the economics of government’s program to build affordable housing, an association official said.
According to the AIIFA, the costs of billet and ingots was INR 27,300/mt ($429/mt) in October 2016 and surged to an average of INR 34.300/mt ($538/mt) in December 2017, and induction furnace operators were hamstrung in reining in price of semi-finished steel with no control over prices of their key raw materials like scrap or sponge iron.
It was pointed out that cost of sponge iron has increased threefold over the last three months to INR 24,000/mt ($376/mt).
The Sponge Iron Manufacturers Association (SIMA) has sought government intervention in curbing prices of raw materials, pointing out that the country’s largest iron ore miner NMDC Limited hiked prices of iron ore lumps and fines on January 2, 2018, the third price increase announced by the miner since November 2017.
Government sources said that several industry associations have petitioned the Ministry of Steel seeking the setting up a regulatory body to monitor prices from raw materials to finished products and with power to check profiteering by any segment in the chain of production.
The sources said that, while an industry regulatory body is not on the cards at present, the Ministry of Steel has set up a task force on fluctuating prices of iron ore and its recommendation is awaited by the government.
Minister for Steel Birendra Singh on Thursday, January 11, said, “As a government we cannot intervene in price movements but we can explore ways to curb price swings.”
“Fluctuations in prices of raw materials and semis can disturb the exercise of budgeting by small steel players and some mechanism can be thought of to check such price fluctuations,” he added.