 "steel, exports")
JSW Steel is offering differential pricing as part of its personalised services for micro, small and medium enterprises (MSMEs), marking a trend as the industry ups its bills.
The company said personalisation ensures quality and availability. “The right quality of product and just-in-time supplies along with a preferential international pricing will enable the MSMEs to compete in the international market,” said Jayant Acharya, director (commercial & marketing), JSW Steel.
JSW has launched a site where MSMEs can register. When supplies can be predicted, the ability to participate in the international arena becomes much better, pointed out Acharya.
MSMEs account for 22-25 per cent of the company's supplies. For MSMEs, a proper supply chain and pricing advantage will help it compete with international players in the export market.
Typically, MSMEs buy from the local dealer at local market prices. “We have come up with an international pricing mechanism and prices for the MSMEs will be governed by it," explained Acharya.
The increase in steel prices since August has been a bone of contention for user industries. EEPC India said recently that the sharp rise in steel prices has dealt a crippling impact on the country’s engineering exports which are facing the most challenging global markets in the face of Covid-19 pandemic in several major economies.
Since August, prices of hot rolled coil (HRC) have increased by about Rs 8,000-8,500 a tonne; prices of hot rolled coil (HRC), a benchmark for flat steel, is about Rs 46,000 a tonne now.
However, Acharya said steel was a cyclical industry. “The pricing is a reflection of global steel prices. Pricing of steel today is also affected by iron ore prices. Internationally, iron ore prices are high and in the domestic market too prices have moved up significantly over the last few months.”
Pricing of iron ore in the domestic market has remained at elevated levels, also due to concerns around availability. Around 19 mines were auctioned in Odisha of which five are operational and the balance are yet to go onstream.
“What we are suggesting is to make this iron ore available so that availability is not affected,” said Acharya.
The government too is looking at ways to address problems relating to availability of iron ore.
Steel minister Dharmendra Pradhan recently said policy intervention in iron ore mines could avoid disruption of the supply chain. However, on steel prices, he said that the price of steel was based on market dynamics and the government would not intervene in a free market.
