The government has urged the steel manufacturers to explore the prospect of providing relief to the Micro, Small and Medium Enterprises (MSME) segment by reviewing the high prices of benchmark hot-rolled coil.
Minister for Commerce and Industry Piyush Goyal met steel industry stakeholders on Thursday and stressed on the requirement for easier and cost-efficient supply of steel to small industries, which use steel as input for manufacturing components and other engineering products.
Nearly all main steel makers in India have hiked prices of the benchmark hot-rolled coil by up to Rs 3,500 a tonne. The steel industry claims that their fuel costs have gone up by over 70 per cent as against last year and a drop in iron ore prices is not adequate to offset the hike.
The industry defended the increase in steel prices by saying that global coking coal prices have
crossed all-tike high; particularly the prices of Australian premium coking coal had leapt to around $430/tonne on freight-on-board levels in November as against $110-120/tonne in April 2021.
The current shortage in coal owing to an abrupt spurt in demand didn't help as the state-owned Coal India Ltd. had to prioritise coal supply for the power sector.
Nevertheless, after Goyal appealed to the industry players to contemplate assistance for the MSME sector, the steel industry stakeholders expressed intent to identify affordable solutions to handle their challenges, specifically in the wake of the COVID-19 pandemic.
Struggling with high input costs, the All India Council of Association (AICA) of MSMEs, which is an umbrella body for 170 MSME segment associations, had requested the government to let the import of all steel materials based on cost and quality requirements.
AICA had also urged the government to ban iron ore and steel products' exports in June this year as the country began crawling out of the clenches of the second pandemic wave.
"Government should allow import of all steel materials based on cost and quality requirements at a nil import duty (no anti-dumping) and also ban export of iron ore and steel products. It may be noted that better GDP growth can be realised if value-added products are exported rather than raw materials. This will generate employment too," AICA stated in a statement.
"The steep hike in price of raw materials across all sectors, despite low consumption, and subsequent drop in the production by MSMEs is directly leading to loss of employment," it added.
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