As the Indian steel sector reels under the impact of input price, spiral steel manufacturers urged the government to assure them of iron ore ‘security’ and raw material availability.

“At a time when entrepreneurs are going in for both brown field and green field expansions and steel sector is attracting the largest amount of investment in India, it would be difficult for the steel manufacturers to absorb all the cost escalation in the raw materials”, Indian Steel Alliance (ISA)  President Moosa Raza said in a statement. ISA is a club of steel manufacturers in India.  “The need of the hour is to enable the industry to expand and produce more, by assuring them of iron ore security and raw material availability. This is the best way of bringing down prices,” he said.

 In market economy where the prices of raw materials are governed by export and other official policies, how long will the steel manufacturers continue to absorb the huge escalation in the cost of production without affecting their margins and impacting on their ability to expand is moot question, Mr Raza said. 

He claimed between September of last year and January of this year, a period of 5 months, there has been an “unprecedented surge” in the major inputs going into the production of steel.  Iron ore, coking coal, coke and scrap have all seen a severe price escalation, Mr Raza said.  Iron ore which was fetching $60 dollars in March 2007 climbed to $150  in December 2007 – a rise of 150 per cent in nine months.