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Steel producers ride high on introduction of MIP

Visakhapatnam: Domestic steel producers in the port city are breathing a sigh of relief after the introduction of minimum import price (MIP) on imported steel products by the central government in February earlier this year.
According to steel industry sources, the introduction of MIP helped domestic steel producers to increase prices of products by around Rs 5,000 per tonne during that last couple of months. Vizag has steel producers including state-run Visakhapatnam Steel Plant (VSP), Steel Exchange India Limited (SEIL), Beekay Steels and Mahamaya Steel Industries in Vizianagaram.
Speaking to TOI, director of Simhadri TMT (SEIL), VV Krishna Rao said, “Following the notification of MIP by the central government, the influx of Chinese steel is more or less curtailed and only old orders or those in transit are now arriving at the market. Steel producers are now getting a fairly good price as compared to the downtrend which was seen about four to six months ago.”
“We are hopeful that this trend will continue in the coming days because of higher demand from various projects. We are expecting demand for steel to increase due to river linking projects and six-lane road projects of the golden quadrilateral and also because of the focus on rural roads,” Rao also adding that with focus on construction of houses for the economically weaker sections of society, the steel sector is looking at a positive growth in the coming days.
Meanwhile, former president of Visakhapatnam Steel and Cement Dealers Association Ganesh Kancherla said, “In the last three months, the prices have gradually increased by around Rs 5,000 per tonne. Depending on the brands, the steel prices of different companies vary from Rs 33,000 to Rs 39,500 per tonne.”
Meanwhile, an RINL official said, “We had sold steel at around Rs 28,000 to Rs 29,000 during November and December, which was causing a loss for the steel plant. But, now because of the increase in rates, the prices have increased giving the plant a little bit of margin. All the VSP long products have benefitted due to the MIP and demand is likely to increase because of the quality of Vizag Steel. In earlier cases before MIP was introduced, the price difference between Vizag Steel and Chinese steel was more than Rs 5000 per tonne. But, now that has changed and people don’t mind purchasing Vizag Steel if there is difference of Rs 500 or Rs 1000 per tonne due to quality.”
However, a builder in the city said, “Increase in steel prices also leads to increase in project cost of construction projects.” Citing an example, he said, “The cost for a 20 flat apartment with increased steel prices would be around Rs 30 lakh considering a benchmark of 3 kg of steel is used per square feet. But, fortunately now sand prices have reduced, which will offset this increase.”
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