30-Dec-2020
Hot-rolled coil prices have increased by 46 percent to Rs 52,000 per tonne in November as compared to Rs 37,400 per tonne in July this year. Rebar TMT, which is used in the housing and construction sectors, had touched Rs 50,000 a tonne, industry sources said.
Indian
Steel Association currently represents almost all the major Public and Private
Sector steel producers of India and intends to be focal point for steel
industry related deliberations in the country and abroad.
The Indian Steel Association (ISA) approached Prime Minister’s Office
after Union Road Transport and Highways Minister Nitin Gadkari wrote a letter
to the prime minister on the impact of rising steel prices on infrastructure
projects.
"We would like to highlight some of the very serious and
compelling reasons which have left the steel industry with no recourse, but to
raise prices of steel from time to time," the ISA said in its letter to
the PMO.
Hot-rolled coil prices have increased by 46 percent to Rs 52,000
per tonne in November as compared to Rs 37,400 per tonne in July this year.
Rebar TMT, which is used in the housing and construction sectors, had touched
Rs 50,000 a tonne, industry sources said.
In their letter ISA mentioned about the issues related to iron
ore, price rise of raw materials, shortage in global steel supply and lower
capacity utilization because of lockdown due to COVID 19.
"Due
to a temporary shortage of steel in the wake of the COVID-19 disruptions, the
international prices surged to over USD 750 per tonne from the bottom of USD
397 per tonne witnessed this year. As India is an open economy, the steel
prices in the country move up with the global prices," ISA secretary
general Bhaskar Chatterjee said.
He also mentioned that iron ore price has increased more than
double from Rs 1,960 to Rs 4,160 per tonne in the period of June-December 2020.
"With
an increase of Rs 1,000 in iron ore prices, the minimum impact is Rs 2,000 per
tonne in steelmaking," Chatterjee said.
Iron ore production in the April-October period of 2020 was at
92.08 million tonne, registering sharp degrowth of 30 percent over the same
period last year.
On the other hand, iron ore exports had surged by 70.3 percent to
29.2 million tonne in the first half of the current fiscal.
Explaining
why the metal price has been raised, the ISA said Indian crude steel production
fell by 19 percent in the current financial year.
"Indian
steel industry faced severe disruptions in production caused by the
unprecedented COVID-19 pandemic. Consequently, many steel companies in India
with sub-optimal operating capacity showed substantial cash losses due to non-
absorption of huge fixed costs for the quarter ended June 2020," it added.
(Source:
Moneycontrol / PTI, edited)