Casting doubts over assertions that the MIP could alleviate the debt woes of steel majors, an industry analyst told ISMW this can happen only to a limited extent.
“The MIP will not make a significant dent, because the volume has to go up to get the players out of their debt. This cannot happen by hiking prices," the analyst said.
“This price increase will help the major players to some extent but is damaging the MSME, because 60% of engineering exports are from this space.
China’s prices are already down. This price increase is putting steel exports on the back foot in a global scenario, where all prices are falling,” the analyst reasoned.
“If prices remain constant and the MIP protection is in force, then there should not be an issue. But if the major primary manufacturers use the MIP as a means to increase prices, then there is a problem,” the analyst said, hinting that the MIP was influenced.
“Otherwise, how could steel prices go up by as much as Rs 1,500-Rs 2,000 per ton in a depressed market," the analyst wondered.