Govt urges steel makers to provide relief to MSME sector

The government has urged steel producers to investigate the possibility of providing relief to the MSME sector by reviewing the high prices of benchmark hot-rolled coil. On Thursday, Minister of Commerce and Industry Piyush Goyal met with steel industry stakeholders and emphasised the importance of a more convenient and cost-effective supply of steel to small businesses that use steel as an input for manufacturing components and other engineering products. Almost all of India's major steel producers have increased the price of the benchmark hot-rolled coil by up to Rs 3,500 per tonne. The steel industry claims that fuel costs have increased by more than 70% compared to last year and that a drop in iron ore prices is insufficient to offset the increase. The steel industry defended the price hike by claiming that global coking coal prices have reached all-time highs, with Australian premium coking coal prices jumping to around $430 per tonne on freight-on-board levels in November, compared to $110-120 per tonne in April 2021. The recent coal shortage caused by an unexpected surge in demand didn't help matters, as state-owned Coal India Ltd was forced to prioritise coal supply for the power sector. However, after Goyal urged industry players to consider assisting the MSME sector, steel industry stakeholders expressed a desire to find cost-effective solutions to their problems, particularly in light of the Covid-19 pandemic. Faced with rising input costs, the All India Council of Associations (AICA) of MSMEs, which represents 170 MSME sector associations, petitioned the government to allow the import of all steel materials based on cost and quality criteria. In June of this year, as the country began to emerge from the grips of the second pandemic wave, AICA urged the government to prohibit the export of iron ore and steel products. Image Source