The Hindu Business Line : Spiralling raw materials prices hit engg units

Coimbatore, March 17 The sharp rise in prices of major industrial raw materials, especially the iron and steel prices, in the last one year has affected the working of industries, causing slow-down in industrial and construction activities, according to the Coimbatore District Small Scale Industries Association (CODISSIA).

In the case of iron and steel, CODISSIA has said that the major manufacturers of these products have resorted to increasing their prices on a weekly basis since January 2008, with the increase being 30 to 50 per cent in most cases.

Citing specific cases, the association has pointed out that pig iron price which remained at Rs 22,000 per tonne in April 2007 went up to Rs 26,000 by January this year, but the price has since gone up to Rs 31500 (as of this month). As for the construction steel, the per tonne of steel quoted at Rs 31,600 in April 2007 had risen to Rs 40,000 by January this year and it is being quoted now at Rs 49,000.

In the case of structural steel, price which rose by 21 per cent between April 2007 and January this year from Rs 31,000 to Rs 37,500 made a sharp increase to touch Rs 47,500 this month.

The spiraling increase in the iron and steel prices has hit the units which are to honour their supplies having committed by booking orders. The situation, according to Mr C. Muthusami, President, CODISSIA, had gone to the extent that many units seriously consider to shut down their units to prevent losses. Loss of industrial production leading to loss of jobs, further increase in inflation and rise in cost of construction have become inescapable after-effects of the raw material price surge, the association said and called for the Central Government’s intervention to stem the iron and steel prices.

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