Steel industry against regulator in the sector

NEW DELHI: The steel industry on Thursday hit back at the Steel Ministry for suggesting a regulator in the sector saying it will be a retrograde step that will "put the manufacturers between two prongs of a pincer".
    
"While steel manufacturers shared the government's concern about current price situation…any attempt to regulate market forces operating on steel prices disregarding root causes is a retrograde step and will adversely affect growth of the industry," Indian Steel Alliance (ISA) Moosa Raza said in a letter to Prime Minister Manmohan Singh.
    
ISA's assertions comes barely 24 hours after Steel Minister Ram Vilas Paswan asked the Prime Minister to impose export duty on steel, remove import duty and withdraw DEPB benefits for steel makers to contain prices.
    
Raza said the input costs have shot up unimaginably high and have gone beyond the capacity of steel utilities to absorb the same. He cited that spot prices of iron ore have increased to $150 per ton from $50 a ton, while scrap prices shot up to 500 dollars.
    
"Even the state-owned NMDC has raised contract prices by 50 per cent in the middle of last year. Coke from China has hit the ceiling with a price of 523 dollars," Raza pointed out.
    
"In the light of this, any talk of regulating prices will tantamount to putting the steel manufacturers between two prongs of a pincer," the ISA chief said.
   
On one hand the unabsorbable cost push would compromise the margins for the steel producers, while on the other hand a controlled or regulated regime would compromise its very survival, Raza said.