ROURKELA: Amid domestic iron price fluctuation, the secondary iron and steel industries, mostly in the MSME segment, in Sundargarh district are feeling the heat of sustaining profitability with no commensurate fall in cost of iron ores against failing prices of iron products.
Industry sources informed, over the past three to four months, around 42 sponge iron plants in Sundargarh are running to capacity and feeling the pressure to sustain profitability with high cost of production to their relatively small profit margin.
They said sponge iron is mostly converted into billets to produce finished long products including steel rod, angle and channels. For a while the sponge price was on the lower side at about Rs 26,000 per tonne, adding two days ago sponge iron price rose to around Rs 29,500 to allow some relief, but dropped by Rs 500 on Saturday amid fear of further fall, they pointed out.
Former chairman of Odisha Sponge Iron Manufacturers’ Association (OSIMA) Yogesh Dalmia said lower sponge iron price is giving them pain as cost of iron ore, the key ingredient in sponge iron making, continues to be on the higher side of above Rs 6,000 per tonne.
“Adding to the woes of the local industries, the logistic costs are also on the higher side due to different freight rates pushed by truckers’ unions,” he stated ruing that freight cost in Odisha is always higher than places outside Odisha.
Small steel makers across the country, at the end of February, had demanded the Central government to restrict duty-free export of low grade iron ores to meet demand of the domestic industries, Dalmia said adding, for the same reason of unavailability of affordable iron ores the sponge iron industries in Sundargarh with small capital are suffering.
Former president of the Rourkela Chamber of Commerce and Industry Subrata Patnaik said the secondary iron and steel industries in the MSME segment provide bulk employment to the local people, adding when profitability of these industrial units gets hit it creates pressure on the job scenario and local economy.
“Most of the time the local iron industries suffer due to unavailability of iron ores,” he stated urging the Odisha government to take up the issue with the Central government to restrict export of iron ores to help the industries in Odisha.