TN forging industry seeks 25% duty on iron ore exports

The Association of Indian Forging Industry (AIFI) has urged the government to either stop iron ore exports from the country or levy 25 per cent duty on them. AIFI also urged the government to set up a regulator to control steel prices.

AIFI asked the government to force steel manufacturers to reduce prices to ex-factory international prices and not on landing price.

Vidhyashankar, president, AIFI, said steel prices in India had shot up 33 per cent in the last eight weeks. The forging industry is at present mostly dependent on Indian steel for domestic sales and finished product exports. Steel is the key input in forgings at 60-70 per cent of the input cost.

Pig iron and steel scrap are key inputs in steel castings. Price increases of 46 per cent to around Rs 30,000 per tonne have been witnessed for pig iron from Rs 16,000 per tonne earlier, and 47 per cent for steel scrap to Rs 29,000 per tonne (Rs 16,000 per tonne).

Vidhyashankar added that ex-factory steel prices in the international markets were 20-30 per cent cheaper for local delivery than Indian local prices. According to AIFI, the increasing exports of steel have been fuelling price increases in the domestic market and are keeping India in the lower rung of the value chain.

He noted that China had taken measures to encourage export of finished goods and levied 25 per cent export duty on carbon steel. The situation in the domestic market is also 'grim' as Indian forging manufacturers face the onslaught of imported Chinese component.