AIIFA seeks govt action as ingot, billets prices soar

The All India Induction Furnaces Association (AIIFA) has sought the government's intervention to check rising prices of semi-finished steel products used to make construction products, saying the price rise could affect the affordable housing programme and infrastructure projects.

The All India Induction Furnaces Association (AIIFA) said prices of semi-finished steel products such as ingots and billets have gone up drastically in last three months.

"A tonne of billet and ingot which cost Rs 27,300 a metric tonne on October 26, 2016 can be bought at Rs 34,300 per metric tonne today on December 26, 2017," AIIFA General Secretary Kamal Agarwal said.
 

Ingots and billets, made from sponge iron and scrap, are raw materials for making angles, structural and TMT used as construction material, Agarwal said, adding that the price rise can also affect government's affordable housing programme.

Short supply of iron ore pushing up sponge iron prices is one of the reasons for the rise in prices of semi-finished steel products, Agarwal said.

When rates of raw materials are rising then cost of any construction, whether private or by the government, will go up, he said.

The government must intervene immediately to check the the price rise, he said.

Induction furnaces produce ingot and billet from raw materials like scrap and sponge iron. Sponge iron is made from iron ore which is supplied by state-run miner NMDC to the sponge iron industry, Agarwal explained.

In November 2017, the iron ore lumps were at Rs 2,300 a tonne and in the following month December, they are at 2,600 per tonne. During last month, fines cost Rs 2,060 per tonne and this month they are coming at Rs 2,260 a tonne. Agarwal said.

"You closely see that the level at which NMDC has increased the rates and to the level or percentage by which the rates of ingots and billets have gone up," the general secretary said.

The government must take some action to check this kind of behaviour in the prices else construction cost of key infrastructure projects like highways, metro trains, government buildings etc will go up, he added.