The price of steel has risen by 35-40% in the last three months, along with zinc and aluminium, and this has put medium, small and micro enterprises (MSMEs) in great jeopardy, especially when they are yet to recover from the COVID-inflicted business losses.
Industry body KASSIA on Thursday brought this to the attention of the government and urged for intervention either by subsidising the prices or imposing price control, in order to ensure prices are reigned in.
“This sudden spike in prices has made it impossible for MSMEs to meet confirmed orders and they are in serious danger of losing exports markets to competitors,” said K.B. Arasappa, president, KASSIA. The government must step in to ensure steel is supplied at a competitive price to consuming small industries, he demanded.
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Steel is the basic raw material for many micro and small enterprises in the manufacturing sector and the price hike has put a large number of them under distress.
“This has come up on them as though the COVID-related disruptions were not bad enough. KASSIA would like to urge the government to urgently intervene in the matter so that the steel consuming small industries are saved from closure,” added Mr. Arasappa.
Confirming the price scenario, Basant Poddar, mentor, Federation of Indian Mineral Industries (South), said there has been a spurt in the price of steel as construction activities resumed post monsoon.
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“There was nothing happening for several months because of the pandemic. There is a pent up demand. Also things are slowly picking in the infrastructure, railways, residential and rural housing spaces. This has pushed up demand for steel and therefore prices went up now,” he said. In addition to that, the prices of raw material - coking coal and iron ore - too have gone up, Mr. Poddar added. In spite of being the second largest steel producer, India’s per capita steel consumption is dismally low at 72 kg as against a world average of 225 kg, while it is 590 kg in China.