Indian component makers though do not import alloy steel now, have to pay the price since domestic suppliers benchmark their price on landed cost of alloy steel. Since August 2007, prices of various types of alloy steel have seen sharp rise in the price.
Industry sources said that another round of increase is expected in June which will see a price revision of Rs 3500-4000 a tonne.
Earlier last month, the price of non-alloy steel was revised to make it zero duty item, but was done only for retail consumption, that primarily go into housing. ACMA is asking for this treatment across all grades of steel, viz alloy and non-alloy steel.
Rough estimates indicate that the Indian automobile sector uses nearly 7 lakh tonnes of steel (cold-rolled and alloy) a year. ACMA estimates that nearly half of this is used by auto component suppliers which is primarily alloy steel like carbonated steel, chrome steel and chrome-moly steel.
ACMA also contends that since automobile manufacturers expect parts supplies in India to bench mark the price with Chinese makes, the domestic steel price in India must also match that of Chinese prices.
"We would be able to compete with China (in the Indian markets) only if our inputs costs also match theirs," said Vishnu Mathur, executive director, ACMA.
Carbonated and chrome steel from China would approximately be equal to Rs 40,000 a tonne if imported. The domestic price of these two items are around Rs 3000-5750 a tonne higher in India.
He added the apart from rising steel prices, the industry has to deal with imports from China too. "In some specific product categories, our imports is completely from China like steering systems and wheel rims," he added.
