The Association of Indian Forging Industry (AIFI), the apex body of the sector and a key player in the auto component manufacturing sector, has demanded transparency in steel pricing by aligning to a weighted index of prices of essential inputs for steelmaking and relaxation in mandatory BIS certification for carbon steel imports.
“Currently, the industry is faced with an unprecedented crisis due to factors like steel pricing issue, minimum import price (MIP) on steel imports and compulsory BIS certification. The forging industry being a critical part of the Indian manufacturing industry stands to get adversely impacted and these challenges need immediate attention,” said Muralishankar Sambasivam, vice-president, AIFI.
Addressing mediapersons on Friday, he said apart from catering to the automotive sector, solar, aerospace, railways and wind sector, the forging industry also plays a key role in contributing to the forex by way of huge exports.
As per a survey conducted by AIFI in 2016, the estimated turnover of 384 forging units operating in FY15 was Rs 6,100 crore, providing employment to around 100,000 people. The investment in plant & machinery also increased from Rs 15,500 crore in FY14 to Rs 27,833 crore in FY15. Overall production of forgings increased from 21.1 lakh tonne to 22.5 lakh tonne, he pointed out. “The key challenge and concern before us is the global slowdown, which has roiled commodity markets and lowered steel prices to more-than-a-decade-low levels in the last 18 months.
Prices of major input materials like steel scrap, coke, iron ore have dropped by more than 30% globally over a year.
Internationally prices for plain carbon steel used for the forging industry has come down to as low as $390-$450/tonne,” he said.