Transporters’ strike in Gujarat still continues from Saturday till date. The strike has restricted the movements of Steel and made offers costlier.
Ongoing transporters’ strike in Gujarat has resulted in the shortage of raw material i.e. Scrap. In Gujarat, majorly Melting Scrap is used as raw material by Ingot manufacturers and plate cutting Scrap is used by re-rolling mills. Alang is the biggest supplier of plate cutting Scrap but its transportation is now restricted owing to the strike. Since the beginning of this strike, the prices of Finish steel have raised sharply in major cities of Gujarat by INR 300-500/MT. While in Alang, the trading of Ship Breaking Scrap had come to a halt.
Hike in diesel prices is the main cause of transporters’ strike. They are demanding an increase of INR 100/MT in freight and so far, its unheard by the local manufacturers. According to shippers and manufacturers, “overall Steel market in Gujarat is numb thus; we are not able to meet the demand of high freight by the transporters at present.” Currently, the transportation charge is around INR 335/MT for local supply in Alang. Meanwhile, those who require material urgently have paid high freight charges of around INR 400-500/MT. But other i.e. a majority of players, have refused to pay high charges. They are of a view that if Steel prices fall, then the transportation cost will become an extra burden on them.
On Tuesday i.e. 10 December, 2013 a meeting is scheduled, to sort out the expectation of the transporters. However, market participant do not expect that the charges will improve unless, the Steel demand improves.
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