The Federation of Industries of India (FII) has appealed the Government to take measures to contain the sharp spike in steel prices and impose export duty on HR coil exports. Earlier this month, the All India Confederation of Small and Micro Industry Association also placed a similar appeal.
If the Government does not intervene, most cold rollers, pipe and engineering industries and down stream small scale industries will be forced to close down their operations, said Mr H.L. Bhardwajm General Secretary, Federation of Industries of India. “We suggest duty-free import of HR coils should be allowed while imposing an export duty on HR Coil to contain inflation in steel prices,” he added.
There has been an increase of about Rs 9,000 a tonne in steel prices in January and February by the steel producers leading to closure of factories as increase in steel prices has resulted in drop in sale of all engineering products including steel pipes. All the manufacturers are carrying heavy inventory as sales are down and most factories are running at 25 per cent capacity just to retain the work force, he said.
Steel makers have increased prices by 25 to 30 per cent anticipating a jump in coking coal prices after the recent floods in Australia. Actually the coal import which the producers have been receiving so far was at old and lower rates. So there is no reason for the steel producers to increase price in last two months, said Mr Bhardwaj.