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Steel Industries Assn demands swift govt action for survival
Steel Industries Assn demands swift govt action for survival
High pricing of iron ore for the long-term linkage (LTL) customers has been resented by steel and other end-use industries of the State
Jajpur: High pricing of iron ore for the long-term linkage (LTL) customers has been resented by steel and other end-use industries of the State. Industries sourcing iron ore via e-auctions organised by the State-owned Odisha Mining Corporation (OMC), which is now the largest State merchant mining company, said the price determination for LTL customers is arbitrary and not based on actual cost.
Drawing the attention of the OMC chairman to the high pricing of iron ore, KNIA president appealed for re-auction of the iron ore with lower floor price, in view of the drastic changes in the iron ore on export duty and poor response in the auction on May 19.
KNIA president added that though we had forewarned OMC before the auction that the base price should be Rs 4,500 per MT for Daitari Iron Ore CLO in view of the low product price of DRI which was Rs36,000 ton at that time; but they arbitrarily fixed the floor price Rs 5,600 per MT because of which poor bidding was observed. Of the total auction of 876,000 tonnes by OMC, only 500,000 tonnes was booked during the auction; ever since the new prices have been fixed lifting is not happening and the end user industries operations are becoming unviable.
It is a regular phenomenon now that OMC fixes a high floor price and then they make the failed auction price as applicable price for LTL buyers without any basis and against the terms of the contract.
The Iron & steel industries have been facing many challenges because of which many plants at Kalinganagar have already closed amid poor market demand and diminishing product price, price hike will create a poorer situation in the industries.
It is learnt that thousands of contract workers have already been retrenched by the industries. The livelihood of workers in the mines, including truck drivers, helpers and workers, is also at stake and The State government needs to intervene immediately to revive the situation. Since the DRI (Sponge Iron) prices have further dropped to the level of Rs 32,000 ton and with export duty been levied on iron ore, pellets, pig iron, it is imperative that OMC conducts re-auction with floor price of CLO @ Rs 3,000 on and Fines @ Rs 2,000 ton so that the industries survive and the units are not closed.
The industries fail to understand as to why OMC is piling up stocks at their mines and not offering a fair price to users, which will benefit both the government and industries? said president of KNIA Kandoi.
