ET reported that in the wake of slowdown in the economy and slump in demand for steel, over 150 small sponge iron units have shut down operations. Besides, several small and mid-sized steel plants and rolling mills scattered across the eastern region are on the verge of closing down manufacturing units temporarily.

As per report, there are close to 300 organized and unorganized sponge iron units spread across Orissa, West Bengal and Chhattisgarh. These units are dependant on National Mineral Development Corporation and private miners for iron ore.

Mr Anil Nachrani President of Chhattisgarh Sponge Iron Manufacturers’ Association said that “Both sponge iron makers and small steel making firms are struggling to make their ends meet as they are operating on small margins. Demand for steel has already plunged steeply. Moreover, NMDC’s recent move to raise iron ore prices has worsened the situation.”

Mr Nachrani said that “If the situation worsens further, many small units may either cut production or close down completely.”

The association has recommended that NMDC should roll back price hike and that railway freight should be brought down further. Besides, it has also recommended imposition of up to 20% import duty on steel to prevent dumping from China, Thailand and Ukraine.