Steel Exports Should be Banned for 6 Months: CICU
''Although these mills are earning foreign exchange by exporting steel, it's hampering export of finished goods which attract more value addition. Steel price per Kg ranges between 50-60 per kg whereas goods manufactured like Auto parts, Hand Tools, Bicycle Parts, Sewing Machine Parts sold at Rs 200 to Rs 350 per Kg and it provides employment of 110 Million in MSME in India,'' the association said in a statement.
As the steel prices have hit Micro, Small and Medium Enterprises (MSME), the Chamber of Industrial and Commercial Undertakings (CICU) has asked the Centre to ban the export of steel for at least six months.
In this regard, a meeting was held on Saturday.
Steel prices have gone up from Rs 42 per Kg to Rs 65 per Kg for CRC sheet and HRC sheet has gone up from Rs 36 per Kg to Rs 56 per Kg in the last 5 months. Moreover, Re Rolled steel has gone up by Rs 10 per Kg. Plastic has gone up by Rs 15 per Kg.
Quoting several news reports, the association said that large steel rolling mills are preferring to export steel. They have booked around 10000 t HRC (re rolling grade) USD 735/t FOB for Jan – Feb ‘21 for Europe. Another mill booked 20000 to 30000 Ton HRC @ USD 705-710 per Ton/ FOB to the Middle East.
”Although these mills are earning foreign exchange by exporting steel, it’s hampering export of finished goods which attract more value addition. Steel price per Kg ranges between 50-60 per kg whereas goods manufactured like Auto parts, Hand Tools, Bicycle Parts, Sewing Machine Parts sold at Rs 200 to Rs 350 per Kg and it provides employment of 110 Million in MSME in India,” the association said in a statement.
”MSME will not be able to book order considering the current raw material price and number of MSME’s will be forced for closure due to this Turbulence,” it added.
Pankaj Sharma, General Secretary CICU said that due to steep hike in raw material prices the industry is in a panic situation.
”In the last five months, the price of stainless steel increased by 32 per cent, to Rs 200 a kg, aluminium by 26 per cent, to Rs 210 a kg, and natural rubber by 52 per cent, to Rs 156 a kg. Copper, a key component for many in the MSME sector, has touched Rs 600 a kg, an increase of nearly 77 per cent,” Sharma added quoting a survey report.
”Government should provide long term policies to save MSME. The service sector will also be affected by the same. prices of certain raw materials have gone up, industries giving orders are not able to match the prices and units are forced to shrink our margins to stay afloat, in result, the companies will not be able meet their overhead costs, which will result in defaults and non-payment of benefits and salaries to employees,” he added.
Upkar Singh Ahuja, President, CICU emphasized that steel is one of the prominent raw materials for the engineering Industry. It is processed and after value addition is sold as finished products to automotive, tractor parts, hand tool etc. companies.
Onkar Singh Pahwa, MD, Avon Cycles Ltd., who also joined the meeting of CICU through video conference, said, “Industry is already going through a very tough time and is not in a condition to bear losses. Due to this, the units will decrease production and affect employment.
Amrik Singh Nexo of Nexo Industries said they had long-term contracts with customers and due to price rise, the orders will get cancelled.