Economy

Recovery in steel demand hit, many small units shut shop

Suresh P Iyengar Mumbai | Updated on April 20, 2021

Large steel makers have diverted the oxygen to be used in their plants for medical purpose   -  The Hindu

Covid resurgence leads to shortage of labour, non-availability of raw materials like oxygen

The sharp recovery in steel demand leading to higher prices has hit a hurdle with various State governments imposing fresh restrictions to tame the fast-spreading Covid pandemic.

Though the government has not restricted manufacturing units, many small-scale units have been closed due to sharp fall in demand.

Moreover, many migrant labourers have left the industrial cities over fears of another complete lockdown.

Chandrakant Salunkhe, President, SME Chamber of India, said most of the small manufacturing units have shut shop due to non-availability of raw material and do not except business to revive before June.

Despite the second wave of Covid infections on the rise across the country, the Central Government does not want to announce a stiff lockdown like before because it would have to announce a special financial package for small and medium enterprises if it does so, he added.

The demand for steel has been hit as many forging and manufacturing factories have suspended operations amid logistics issues, he said.

Also, large steel producers such as Tata Steel, JSW Steel and ArcelorMittal Nippon Steel have diverted the oxygen to be used in their plants for medical purpose.

While AM/NS India is supplying about 200 tonne of oxygen daily for Covid patient, JSW Steel is diverting 185 tonnes of oxygen daily from its Dolvi plant in Maharashtra.

“We need oxygen to save lives. Oxygen is the raw material in steel plants and at this crucial time, we have committed to the government to prioritise saving lives over steel making,” said Jindal in a tweet.

Construction sector

Steel demand from the construction sector has also been affected due to shortage of labour.

Anand Gupta, Chairperson, Housing and Rera Committee of Builders Association of India, said the lockdown has adversely affected the progress of all infrastructure and real estate projects.

Compulsory Covid testing, restriction on movement of labour and stoppage of movement of plant and machine has jeopardised minimum 50 per cent labour force with about 40 lakh sitting idle without pay and trying to migrate.

All planned repair works of buildings, road and sewerage will not get completed before the monsoon, he added.

Published on April 20, 2021

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