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According to the Business Standard, steel consumers and suppliers in India are rebelling against producers due to rising prices for finished goods, prompting them to write demands to the central government.
Steelmakers justify the price hike by pointing to a shortage of iron ore among other market factors. Iron ore mining companies are pushing for a ban on the export of steel products.
According to statements reviewed by the Business Standard, both producers and suppliers of raw materials have written to the Prime Minister's office. Steel consumers such as electronics makers are also pushing for price controls and a 15 percent export duty. They wrote about this to the Ministry of Energy.
The association (ISA) said the industry "has no choice but to raise steel prices from time to time."
“Many steel companies in India with sub-optimal production capacity experienced significant monetary losses due to the failure to absorb huge fixed costs for the June 2020 quarter. World steel prices plummeted below $ 400 a tonne and domestic prices followed suit ... the economy began to open up, world prices rose to over $ 750 a tonne from the lowest of $ 397 seen this year. As India is an open economy, steel prices move in line with international prices, ”the ISA said.
Steelmakers focused on exports during quarantine to stay afloat. With the growing demand for steel, prices have risen significantly.
ISA also reported that there is currently an "acute shortage of iron ore." “The Indian steel industry is facing challenges as supplies of iron ore are severely limited. At the same time, iron ore prices have shown unprecedented growth in both the national and international markets. Limited supply and rising prices for iron ore, which is the main raw material for steel production, have also led to high steel prices, ”the ISA said.
The Federation of Mines of India (FIMI) said the ISA is "obfuscating the whole issue." Calling the increase in steel prices unreasonable, FIMI said: "The Indian steel industry takes the world price as the basis for calculating steel prices, while it obtains high quality iron ore at relatively lower prices."
