Sponge iron units remain shut amid lack of demand; manpower shortage

Sponge iron units across the country remained closed on Monday amid weak demand and shortage of manpower, an industry body said.

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There is also fear among players over government guidelines putting onus on the entrepreneur if a COVID-19 case is found at their units, Sponge Iron Manufacturers Association (SIMA) Executive Director Deependra Kashiva said.

The government last week announced fresh guidelines for enforcing the second phase of lockdown till May 3, 2020.

According to the guidelines, industrial units located in rural areas were allowed to function from April 20. The units in rural areas will be able to operate only if they follow social distancing norms.

 

"Our members see no demand for their produce. The players have shortage of money also. They are also not opening due to their apprehension over guidelines issued by the Centre and states regarding the onus on entrepreneur if a case is found in their factory," Kashiva told PTI.

However, he did not inform from when sponge iron makers plan to resume operations but said SIMA will inform about the situation to the Steel Ministry.

He said the players do not want to take risk by restarting operations as markets are closed, the movement of goods remains affected and buyers are hesitant of placing orders.

Kashiva further said there are about 306 sponge iron players which are part of SIMA and their units are spread across the states of Gujarat, Jharkhand, Chhattisgarh and Odisha.

Sponge iron or direct reduced iron (DRI) is used in producing semi-finished steel items, ingots and billets, which are further used to make various finished steel items. Iron ore and non-coking coal are main raw materials used to produce sponge iron.