The controversy on steel prices has taken a new turn with the secondary steelmakers accusing state-run mineral giants MOIL and OMC of profiteering by unilaterally hiking prices of critical steelmaking inputs and demanded action against them.

"When the government is making efforts to bring down the prices of commodities, at the same time, Manganese Ore India (MOIL) have again increased prices by 50 per cent for the quarter ending June 2008 in majority of grades, compared to last quarter prices," the Indian Ferro Alloy Producers' Association (IFAPA) said in a letter to Steel Minister Ram Vilas Paswan.

Similarly, it cited, that Orissa government-owned Orissa Mining Corp (OMC) too has raised chrome prices by 198 per cent during April-June to Rs 18,250 per million tonne, compared to Rs 6,131 per MT during April-June 2007.

Accusing MOIL and OMC of increasing prices of ores without any relevance to the cost of production, IFAPA said Private mine owners are increasing the prices of ores as and when the PSUs raise their prices. "This is the root cause of increase in inflation in the country," it pointed out.

Asking the Centre and the Orissa government to take immediate action against MOIL and OMC for hiking prices, IFAPA said it was imperative that such high costs of basic steel- making inputs like manganese ore and chrome ore would have cascading effects and push up prices of finished goods.

The IFAPA pointed out that these minerals were finite resources and their conservation was indispensable in view of the capacity expansion plans by major steel companies. It demanded a ban on the exports of these ores which would also ensure price stability in production of ferro alloys and steel as well.

Ferro alloy is a raw material used in steel production and its prices have risen mainly due to abnormal surge in the prices of manganese ore and chrome ore, it said. The consumption cost of ferro alloy has added nearly three times in the production cost of carbon steel and stainless steel only due to the steep rise in prices of manganese ore and chrome ore respectively, it pointed out.

Carbon steel manufactured from manganese ore and stainless steel manufactured from chrome ore are used massively in the the construction and utensil sectors respectively, the industry body said. – Asia Pulse