Steel price swings hit Mohali units

Uncertainty in steel prices has hit businessmen of Mohali in Punjab.

Mohali is dotted with industries manufacturing tractor parts, agricultural implements (for the domestic as well as international markets) and fastener tools.

According to unit owners, erratic movement in steel prices has been damaging their interests. "Because of sudden changes in prices, we are facing problems in submitting tenders as well," said an industrialist.

The price fluctuation has hit exporters and suppliers to the government agencies the most. Their income has gone down and overtime payment to workers has been discontinued in most units.

Though a price variation clause is there to help vendors during price fluctuations, steel companies, they feel, lack transparency. This was causing arbitrary pricing and black marketing, said an unit owner.

Industrialists said the Punjab Small Industries Export Corporation and the Chandigarh Industrial and Tourism Corporation are authorised to supply steel to small units. But they were not of much help because small units needed steel in small quantities and varied sizes, said an industrialist.

Terming the lack of transparency in distribution a major problem, a farm implements manufacturing unit owner said, "while the price of pig iron increased from Rs 6 a kilogram to Rs 8 a kg in 50 years, it rose threefold from Rs 8 a kg to Rs 24 a kg in the past one and a half years."

The prices of re-rolling materials, which rose from Rs 8 a kg to Rs 15 a kg in 27 years, shot up to Rs 28 a kg in the past one and a half years, he said. Scraps to billet conversion charges have increased from Rs 40 a kg to Rs 60 a kg in the last few months.