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Updated At: Jul 13, 2022 07:46 AM (IST)

Withdrawal of export duty on steel can adversely affect local manufacturers, which use steel in large quantities. file

In the past over one month, steel prices have shot up by Rs 8,000 per metric tonne, making it tough for industrialists in the district to run their business.

Badish Jindal, president, FOPSIA, said, “After a strong protest from steel consumers, the government imposed a duty of 15 per cent on the export of steel in May 2022 to cool down the prices. As a result, the steel plants were forced to cut down their prices. The imposition of duty also led to decrease of HR coil prices from Rs 76,000 Rs 58,000 per tonne and prices of wire rods from Rs 67,000 per tonne to Rs 56,000 per tonne,” said Jindal.

However, reports suggest that the government is planning to withdraw the export duty on steel again. This will help the steel plants to export the raw material on high prices. The steel plants are awaiting the notification and once issued, they may increase the steel prices from Rs 5,000 per tonne to Rs 7,000 per tonne in domestic market, said one of the bicycle parts’ manufacturer.

The local manufacturers, using steel in huge quantities said the steel lobby is continuously making pressure on the government to revert the order of export duty on steel. On June 19, office-bearers of the Indian Steel Association met Finance Minister Nirmala Sitharaman in this regard.

“The government is under pressure to remove the export duty as its forex reserve came down due to decline in steel exports. Due to imposition of export duty, steel stocks dipped down to 16.84 per cent in May, 2022 but due to the assurance from the government there was a slight increase of 4.04 per cent in the month of June. Now, with the news that export duty can be withdrawn, there is an increase of 5.73 per cent during the last 10 days,” said Jindal adding that there is still a huge recession in the industry and production of bicycle and other engineering goods is merely 60-70 percent of its actual production. Under such circumstances the increase in steel prices will badly impact the steel consuming industries.

We have written to the Finance Ministry that the government shall not bow down to the demands of steel cartel by abolishing the export duty. We have also written to the government to clarify the stand on export duty so that the steel consuming industries can plan their productions, supplies and orders accordingly, said local industrialists, who use steel for manufacturing products.

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