BHUBANESWAR, May 22: Spiralling input costs, challenges from imports, increasing domestic competition and slowdown in growth of the infrastructure and manufacturing sectors had resulted in a crisis for Indian steel majors, according to industry sources.

Rising cost of input such as coal and electricity which accounted for nearly 30 per cent of the cost of steel production continued to inflate production costs in India as the manufacturers tried to stay afloat in a difficult situation trying to enhance value addition, the sources said.

While the prices of coal declined or marginally increased in developed countries between 1980-90, coal prices had gone up by 27.5 per cent within the last one year, they said, adding the situation is the same on the power front.

Pointing out that the steel majors were caught in a catch-22 situation, the sources said that while input costs kept spiralling the steel producers had to keep the prices constant because of increasing competition both from imports as well as indigenous manufacturers.

Several steel projects were in the pipeline in Orissa itself, the foremost among them being the Tata Iron and Steel Company Limited (TISCO) at Gopalpur and Nilachal Ispat Nigam Limited (NINL) and the Mesco group at Duburi.

Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.