S. Prasad

‘Stocking of steel by suppliers has created artificial scarcity’

More than 10,000 tonnes of steel are being consumed by small units in Hosur a month

Industrialists demand setting up of steel yard in Hosur

Hosur: Small enterprise units in this industrial town have curtailed production by over 40 per cent following increase in steel prices.

In the last four months, prices have gone up from Rs. 36,000 to Rs. 48,000 a tonne. Krishnagiri District Small and Tiny Industries Association (Kridstia) president G.S. Ganesh says: “It is affecting the very survival of many small-scale units.

Anticipating a further increase, major suppliers are stocking steel. This has created an artificial scarcity in the market. Many units find it difficult to convince their customers to bear even a small part of the rise in the prices of finished products. A majority of the small industries are running at 60 per cent production capacity owing to scarcity.”

Finished products

On an average, more than 10,000 tonnes of steel is being consumed by small units in the town every month. The finished products are sent by means of some 600 containers to Whitefield near Bangalore.

Says G. Ravi, a flat promoter: “With new investments such as IT parks and Special Economic Zones (SEZs) coming up in the industrial town, the government should ensure the availability of steel at reasonable prices. It should ensure supply at stable prices for at least six months to tide over the crisis.”

Industrialists in the town want the government set up a steel yard in Hosur to cater to local demand.