Heat is on for refractory, sponge iron, re-roller firms: CRISIL SME Tracker

Moderation in demand led to a fall in steel prices, adversely affecting SMEs

A double whammy — moderating demand and a fall in steel prices — will impact the performance of the sponge iron, re-rolling steel, and refractory sector in the near term.

Small and medium enterprises (SMEs), which account for 75 per cent of the total capacity of these industries, with key clusters in Chhattisgarh, Odisha and West Bengal, are likely to be impacted the most.

Sponge iron is used by re-rollers to produce long steel such as thermo-mechanically treated (TMT) bars through induction furnaces. On their part, refractory products, which are heat and corrosion-resistant material used mainly in linings for furnaces