Piyush Goyal, the Union Commerce and industry minister, has urged steelmakers to provide relief to small industries and exporters, who are facing challenges on account of the spiralling steel prices.
In a meeting held with the steel industry representatives and the actual steel users late Thursday evening, Goyal has said that special care of micro small and medium enterprises (MSMEs) needs to be taken for easier and cost-effective supply of steel—which serves as one of the primary inputs.
Goyal has asked the steel industry stakeholders to assess the manufacturing costs and explore the possibilities of offering relief to small industries—using steel as input for manufacturing of components and other engineering products.
During the review meeting, the steel industry representatives have assured the small enterprises and exporters of affordable solutions to address their challenges, especially in the wake of the pandemic.
Since the last year, steel prices have been rising on account of rising input costs and enhanced demand. With China imposing production cuts, further upward pressure is likely to be witnessed in the price of the commodity in the coming months. With the steel industry passing on the prices to the consumers, benchmark prices have gone through the roof. This, however, is not a domestic phenomenon only as the prices of the commodity have skyrocketed globally in the last year.
The average price of hot-rolled coil (steel) has increased to ₹69,600 a tonne in October this year, up 55% from the November 2019 levels of ₹44,880 per tonne. Another steel variety, cold-rolled coil, has witnessed an 81% jump to ₹90,880 per tonne over ₹50,060 per tonne in November 2019.
This has indeed boosted the profitability of the companies in the organized sector, but has put pressure on the margins of the small businesses that use steel as an input. In April – September this year, listed companies in the metals and minerals space have reported an all-time high net profit of ₹82,500 crore—more than thirteen times of ₹6,000 crore reported in the same period of the previous financial year.
The Union Minister of Steel, Ram Chandra Prasad Singh; Minister of MSME, Narayan Tatu Rane; SAIL Chairperson Soma Mondal, and Rashtriya Ispat Nigam Ltd CMD Atul Bhatt were also present in the meeting.
JSW Steel CMD Sajjan Jindal, Tata Steel MD and CEO TV Narendran; Federation of Indian Exports Organization director-general Ajay Sahai, and Mohit Jauhari of the auto Component Manufacturers association were among the private sector representatives in the meeting.