Steel price rise: Gadkari fumes, writes to PM Modi

Concerned about the sharp increases in the prices of steel and cement, both inputs for construction, the Minister of the Ministry of Micro, Small and Medium Enterprises (MIPYME) and Roads Nitin Gadkari has written a letter to Prime Minister Narendra Modi requesting his intervention to stop the trend.

“Steel companies have raised rates 55% in the last six months. I have written to the Prime Minister and suggested that the issue be discussed at the highest level. You have to make a decision. This (the price increase) is not good. (It should be known) if the increase is in line with the increase in the cost of labor, energy and raw materials. Reducing productivity and increasing the rate is not a good strategy, ”Gadkari said at an Assocham event.

The minister also mocked the cement industry, saying that this (incessant price increases) is also valid for the cement sector.

“At a time when we are trying to create so much infrastructure, this kind of political approach from their side (from the cement and steel companies) would not do them any good in the long run. This is not good for the country either. We need to create a long-term policy for the steel and cement sectors, ”said Gadkari.

The minister said that if the prices of steel and cement companies adhere to their current policy of raising prices, infrastructure projects would become economically unviable and could force the government to change its policy (of acquisition / use).

Just a couple of days ago, Gadkari accused cement units of forming cartels to drive up construction material prices, even as the construction industry is struggling to recover after being hit hard by the pandemic and the shutdown.

“I decided to make all the concrete roads. He wanted to promote the cement industry. But they are only taking advantage (unfairly) of the situation and forming cartels. So now I’m allowing bitumen (for road construction), ”Gadkari said at a Ficci event.

In a recent report, ICICI Securities said that the cement industry’s average operating margin grew 25% YoY in fiscal 2020 and further increased 20% YoY to over 1,250 rupees / ton in the first half of the fiscal year. current.

Steel prices are also hitting a 12-year high as well. Taking advantage of increased demand amid moderate production and limited imports, domestic mills have raised prices three times in the same number of weeks in the current month, driving hot rolled coil benchmark prices in the wholesale market ( ex-Mumbai) to Rs 52,000 per ton from just `36,500 per ton in July, an increase of 43%.

On the other hand, the minister said that the government has finalized the collection of tolls for technology based on GPS (Global Positioning System) to guarantee a smooth movement of vehicles throughout the country. He said this will ensure that India becomes ‘free’ in the next two years. He expressed his hope that toll collections would reach Rs 34 billion in March 2021 and, using GPS-enabled technology for toll collection, would reach Rs 1.34 billion in the next five years.