A 35 per cent rise in prices of steel has resulted in a growing clamour in the auto component sector for curbs on the steel producers to halt exports and increase accountability. Though the steel industry has been saying that the hikes are in accordance with international prices and a result of increase in prices of raw materials like iron ore, component component industry has hit back saying that steel prices have gone up by as much as 60 per cent more than all the raw materials put together.

“Though steel prices around the world are going up, what we have seen in the last four months here is absolutely unwarranted. The hikes are not in accordance with increases in raw material prices,” said managing director and chief executive Asahi India Glass as also the president of Automotive Component Manufacturers Association (ACMA) Sanjay Labroo. “In any case what justification do some of the steel companies who have captive iron ore and coke capacities, have in increasing the prices.”

The auto component industry, one of the largest users of the commodity, has been facing a myriad set of problems from rising Chinese imports to declining exports due to rupee appreciation. The fresh round of steel price increases which in some cases like carbon steel is as much as 49 per cent since November 2007, have left them even more vulnerable.

“Our main competition is with China and we are at a huge disadvantage on raw material costs. The Chinese government discourages export of raw materials like steel and iron ore while they have identified auto components as a major export potential,” said Association of Indian Forging Industry (AIFI) president Vidyashankar Krishnan. “There is an urgent need to step in and restore parity or else the auto component growth story that everybody keeps talking about will go haywire.”

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