A sharp rise in the price of wire rods and its limited supply has become a headache for the steel wire manufacturing sector which supplies the construction and logistics sectors. | |
| Production of wire rod touched 400,000 tonnes in the last fiscal but the industry had to work with raw material shortages and rising prices of wire rods simply because 200,000 tonnes of wire rods were exported at prices that were reportedly higher than domestic prices, it was disclosed at the annual general meeting of Steel Wire Manufacturers Association of India (SWMAI). |
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| Association chairman Mahesh Poddar said at meeting, "This problem has been with the sector for some time now and despite this production was four lakh tonnes of wire." |
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| Poddar pointed out that it was difficult for small exporters to import wire rods, under the advance licence (AL) scheme. |
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| To solve the problem, SWMAI had requested major producers of wire rods to accept AL documents and supply raw materials to steel wire exporters or sell wire rods at international prices. |
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| However, these efforts failed primarily because main producers were not interested in the arrangement suggested and preferred to go in for physical exports, he added. |
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| "It is suggested that upon submission of AL to the raw material suppliers, they should supply to the steel wire manufacturers raw materials at international prices. In turn, the suppliers should get the same benefit as they get against physical exports. This will help the industry export more value added products. In spite of current high international prices, viability can be worked out," Poddar stated at the meeting. |
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| Poddar complained the steel wire industry was facing difficulties following an order of the Supreme Court which stated that drawing of wire did not amount to manufacture. |
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| "After a great deal of effort, SWMAI could persuade the government to insert a suitable section for resolving the problem of modvatability with effect from July 2004. Nevertheless, for the interim period industries are being harassed by the central excise department and there is no uniformity in their stand throughout the country," Poddar said. |
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