Rising Steel Prices Vex Punjab Msmes

The recent surge in steel prices has become a serious cause of concern for the steel industry in Punjab, especially MSMEs

. Irked by the hike in input costs, small industrial units have sought the Union governments intervention to regulate the steel prices.

Steel is a key input for most MSME industrial units and a sharp hike in steel prices will certainly increase the cost of production for these enterprises, thereby leading to erosion of their margins and competitiveness, said Ajay Goswani, proprietor of Ajay Industries, a small-sized engineering firm in Jalandhar, Punjab.

Industry players have pointed out that major steel makers such as Essar, Ispat, Tata etc have raised steel prices by more than 30% in a span of less than 2 months, which has made it very difficult for small-scale units in Punjab to procure adequate steel at reasonable prices.

Hike in steel prices has opened up way for illegal holding of steel by secondary steel makers leading to shortage of steel in the domestic market that is compelling SME units to pay up more for the commodity, as compared to its global prices, said Mahesh Agarwal, a key member of Indian Stainless Steel Development Association (ISSDA).

Representatives of industry bodies such as Punjab Chamber of Industrial and Commercial Undertaking (CICU) and Apex Chamber of Commerce and Industry (Punjab) have urged the Union government to undertake measures to protect MSMEs from the adverse impact of soaring steel prices.

by: David Parks

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