Sponge iron manufacturers have reacted sharply to NMDC’s decision to raise the prices of iron ore lumps and fines by 13 per cent.
“The decision has come as a rude shock to the battered steel industry, particularly secondary steel producers using the sponge iron route for steel-making,” according to Sponge Iron Manufacturers’ Association.
The secondary steel producers, it is pointed out, account for 50 per cent of the country’s total steel production — an estimated 35 million tonnes (mt) out of a total of 70 mt.
World steel prices, according to the association, dropped sharply in the past few months. Within India, the prices of TMT bars, the major construction item, too declined substantially.
Any rise in input cost in such a situation will deal a severe blow to the ailing sponge iron industry employing a very large number people, directly and indirectly, it is observed.
Describing NMDC’s pricing policy “flawed, arbitrary and biased”, the association regrets that the prices have been increased at a time when the entire industry was expecting price cuts.
Referring to the price reductions announced by private miners in Orissa, the association wonders if the NMDC’s decision would not strengthen the cartelisation of Orissa miners.
The association therefore has urged the Steel Ministry to intervene immediately by enforcing price control of the ore through a constitution of an expert body to save a large number of sponge iron manufacturers on the brink and, if necessary, to consider nationalisation of the country’s iron ore mines in overall national interest.