Low Steel Prices Hurt Small Firms: Secretary

New Delhi, Nov 4 (PTI) Low prices of steel in the market now is a problem for small companies, especially when the government is aiming to increase capacity of this important sector in the next five to seven years, Steel Secretary Sandeep Poundrik said on Tuesday.

Addressing the 'STEEL SUMMiT 2025', Poundrik said five years ago prices of the steel were higher than what they should have been.

"But today prices of steel are lower than what they should have been. So price is a challenge... Small players are facing problems," he said.

Poundrik said that about 150 small players have stopped production of steel because of low price.

So people, these small players, are facing problems. You just saw the results of quarter 2 of all companies, almost all of them, the profit margins reduced, he said.

"But price is a problem, especially when, when we need to invest in 100 million tonnes of capacity in next maybe five to seven years," he said.

The secretary also pointed out the surplus production across the world specially in China and consequent dumping is a real problem, not only for us, but for every country.

"Because it is impacting the prices," he said.

Poundrik said that the government is trying to ensure that domestic steel players get a reasonable price.

"The government imposed safeguard duty provisionally on imported steel to ensure that domestic steel industry doesn't face any problem, " he said.

Poundrik said the good news is that steel consumption is increasing, capacity is increasing.

"To cater to the increasing consumption, the new capacities are coming up in last 10 years, " he said

The secretary noted that there is need to protect the steel industry for the long-term self reliance of the country.

"It's a strategic sector, in the sense that if you become dependent on imports, then you may face problems because of geopolitical reasons which we are seeing today in the world.," he said.

Dispelling the perception that steel industry is dominated by 3-4 big players, Poundrik said that 47 per cent of steel in India is produced by 2,200 middle-level steel producing companies.

Poundrik said the hydrogen prices are coming down much faster than what "we were expecting".

"May be in the next five to 10 years, hydrogen will become a viable alternative to natural gas, and the hydrogen route can become a viable option for green steel," he added.

Poundrik said there is need to make more investments and focus on specialty steel.

"Because as our defense sector grows, we will need more and more specialty steel," he added.