Ingot prices down, no change in scrap rates has bizmen in a fix

Ludhiana: The rate of steel, especially ingot, has taken a dive in the past few days, but the businessmen say it has increased their problems.
According to the businessmen, the rates of ingot have dipped by Rs 6,000 per tonne and that of pig iron by Rs 2,000 per tonne, but the rates of scrap, which is an essential raw material for ingot and in finished products like sewing machine and cycle parts, have not gone down. In another problem for them, the customers, whose orders were under process, have started asking for discounts, citing decrease in rates of raw material.
Jagbir Singh Sokhi, president of Sewing Machine Technology Park Cluster, said, “During the past about four days, the rate of ingot crashed from Rs 49,000 to Rs 43,000 per tonne, but rate of scrap, which is linked to ingot rates and is about Rs 5,000 to Rs 6,000 per tonne cheaper than ingot, has not decreased. It is still quoted on the same scale as that of ingot. This situation has given a shock to local manufacturers of ingot because scrap is the main component for making it and when it is available at the same rate (as that of ingot), then why will manufacturers run their factories and incur losses.”
According to Kulwant Singh, general secretary of the Sewing Machine Development Club, “There has been a decrease of Rs 2,000 per tonne in the rates of pig iron recently and it is now available for about Rs 42,000 per tonne. But the rate of scrap, which is an essential raw material for making sewing machine and bicycle parts and casting components of different types, has not dipped. Same is the case with the rates of chemicals and other metals and labour. We are in a fix due to this situation, as after coming to know about the decrease in rates of pig iron, our customers have started asking us to decrease the selling price of older orders that are under process.”
According to Rajkumar Singla, president of Fasteners’ Suppliers’ Association of Ludhiana, “Earlier we were in trouble due to high rates of raw materials of different types, but now the decrease in prices of a few of them has increased our woes. So as of now we are neither purchasing any raw material nor taking any orders until rates of all the connected components also decrease.”