AIFI urges centre to ban exports of steel and Iron ore
2020-12-28 11:13:33 [Print]
The Association of Indian Forging Industry (AIFI) has urged the Centre to ban exports of steel and iron ore due to high prices which are hampering the growth of India's forging industry.
"Steel prices have increased by 25 to 30 per cent in the last three months, putting the forging industry at serious risk, particularly when we are still recovering from COVID-inflicted business losses and the resultant pressure on cash flow, and cash reserves. The industry is still going through a very difficult time and is not in a position to absorb losses. I believe that rising demand for steel, low steel production for the domestic market due to increased steel exports are the prime reasons for price hikes, said Vikas Bajaj, President, AIFI.
''The Forging Association requests the government to consider a ban on steel and iron ore exports so that demand of steel within the country can be met in a cost/price effective manner," he added.
The association cited the Covid-19 disruption as a major factor that has affected the automobile industry, thereby the component suppliers and hence, the forging industry. "While the industry was reviving post the pandemic, the increase in steel prices has hammered the forging industry in India," the association said.
Steel is the basic raw material for the forging industry and typically constitutes 60 to 65 per cent of the ex-factory value of forgings. The association further said that with these two increases, this (ex-factory value of forgings) is expected to rise to around 75 per cent, with such an increase in percentage of the input cost, survival of the industry has become challenging.
"Steel prices have increased by 25 to 30 per cent in the last three months, putting the forging industry at serious risk, particularly when we are still recovering from COVID-inflicted business losses and the resultant pressure on cash flow, and cash reserves. The industry is still going through a very difficult time and is not in a position to absorb losses. I believe that rising demand for steel, low steel production for the domestic market due to increased steel exports are the prime reasons for price hikes, said Vikas Bajaj, President, AIFI.
''The Forging Association requests the government to consider a ban on steel and iron ore exports so that demand of steel within the country can be met in a cost/price effective manner," he added.
The association cited the Covid-19 disruption as a major factor that has affected the automobile industry, thereby the component suppliers and hence, the forging industry. "While the industry was reviving post the pandemic, the increase in steel prices has hammered the forging industry in India," the association said.
Steel is the basic raw material for the forging industry and typically constitutes 60 to 65 per cent of the ex-factory value of forgings. The association further said that with these two increases, this (ex-factory value of forgings) is expected to rise to around 75 per cent, with such an increase in percentage of the input cost, survival of the industry has become challenging.
