India is one of the largest producers of steel in the world, yet the Indian MSEMs are struggling with increasing steel prices and shortage of raw material in the domestic market, which are leading to project cancellations and huge losses for the industry.
The Indian Pipe Manufacturers Association (IPMA) has approached the government with these critical issues, requesting its intervention to control the prices and impose a temporary ban on steel exports.
“Some of the major private sector and public sector steel exporters have achieved more than 50 per cent of their sales volumes through exports, which has created a shortage of raw materials for the domestic steel manufacturers. Steel prices are touching an all-time high level, increasing by almost 60 per cent between July 2020 and April 2021. It has made majority of our orders unviable and has put us in a tight spot,” the IPMA said in a letter to the Ministry of Steel.
The pipes manufactured by the industry are extensively used for critical oil and gas sector projects. It is noteworthy that India has set a target to increase the percentage of natural gas in the energy basket from the existing 6.4 per cent to 15 per cent by 2030.
The vision of adopting greener and cleaner fuel might get hampered due to the existing issues faced by the industry. The unviability of projects may result in permanent closure of some units.
“We wholeheartedly support our Prime Minister’s vision for Aatmanirbhar Bharat and we truly believe that the government will intervene to save the domestic pipe manufactures. In 2008 as well, when steel prices were at an all-time high, the government had intervened, and the prices were reduced to help the industry survive,” the letter said.