Government Continues To Allude Steel Bigwigs Price Game Hurting MSMEs

India -The Delhi government has now rejected the steel industry proposal to reduce the prices on several products by Rs. 1500 a tonne, latest reports confirm. This would have impacted the small businesses and exporters greatly. However, the government has now asked for them to make a better offer instead.

On Thursday, auto component players, engineering goods makers, exporters had demanded the prices to be lowered by Rs. 4000 a tonne. This apparently, is being said, is too low and unacceptable to the government.

A balanced price cut might come to somewhere between Rs. 2500-3000 a tonne.  According to industry sources, in December, the rate of cold rolled strips is estimated at Rs. 77000-80,000 per tonne while for hot rolled coil, it is in the range of Rs. 67,000-70,000 a tonne.

Steep companies have been periodically raising prices, hurting the smaller business owners. But they will now have to settle for monthly price adjustments. The slow exports might have moderated the prices for a bit, but some government intervention is something that has become imperative, industry experts feel. Price fluctuations impact the returns for many smaller vendors and hurts their profits at the end of the day.

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Adding to some relief is the fact that iron ore prices have also come down in December of this year. A day before the Minister of Commerce and Industry Piyush Goyal had spoken to steel industry bigwigs seeking a solution to help the Micro, Small and Medium Enterprises (MSMEs). He stressed on the need for easier and cost-efficient supply of steel to small industries, which use steel as input for manufacturing components as well as other engineering products.  It is worth noting that literally 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 sufficient to offset the hike.