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Saturday, 7 November 2020

Facing scrap shortage, Punjab steel firms hike prices

Vijay C Roy

Tribune News Service

Chandigarh, November 6

Secondary steel producers in Punjab have increased the prices by Rs 3,000-Rs 4,000 per tonne in the past one month. According to sources, with goods trains off track in the state due to farmers' protest, the steel producers are facing shortage of scrap resulting in high prices.

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An industrialist

Exporters worst hit

The farmers' protest led to disruption in rail traffic. Besides impacting the arrival of steel in the state from primary steel producers, it also hit consignments of scrap meant for steel producers. This has led to increase in prices

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On an average, monthly consumption of steel in Punjab is around 6 lakh tonnes. Out of this, three lakh tonne is imported from primary steel producers. Another two lakh tonne is produced from scrap by steel companies in the state. As much as 70% of the scrap is imported and the rest is sourced from other states. Further, one lakh tonne of scrap is procured from within the state and is converted into steel.

"The farmers protest led to disruption in rail traffic. Besides impacting the arrival of steel in the state from primary steel producers, it also disrupted consignments of scrap meant for state-based steel producers. This has led to increase in prices," said sources.

"In the past one month, prices have increased by Rs 3,000-4,000 per tonne which is not sustainable. We are already facing labour shortage and high transportation cost as we are compelled to send consignments by road. The increase in steel prices has come as a dampener in the way of exports," said Amit Goswami, a Jalandhar-based exporter.

Exporters who have committed orders in hand are the worst hit as they are unable to execute the orders due to high steel prices. The increase in prices has hit steel-consuming industries such as bicycle, fastener, auto parts, sewing machines, machine tools and hand tools. The construction sector is also facing the heat as the cost of steel has increased manifolds.

Badish Jindal, another industrialist, said primary steel producers located in other parts of the country have also increased the prices.



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