Trading volumes in flat steel products have been at all time low. But, delay in settlement of payments is a new set of concern haunting many flat steel traders in India. Dealers & traders across some trading regions have reported facing difficulties in getting their payments settled in time. This has affected the interests of many traders.
Looking at the gravity of this situation, SteelMint talked to the president of Faridabad Iron & Steel Traders Association. He said [su_quote]Faridabad which is one of the major trading hubs in the Delhi & NCR region has been through a deep crisis. Usually, payments are settled within 30-35 days, but now the payments are delayed unnecessarily by 2-3 months and in some cases indefinitely for longer periods leading to much difficulty for traders. 80% of trading happening here is facing such delay in payments from the industry.[/su_quote]
This trend is not only confined to Faridabad, traders based in Kolkata are also facing difficulty in getting their payments settled.
A trader based in Kolkata said, [su_quote]60-70% of our orders are directly or indirectly linked to the government projects, the slowdown in government projects has led to delay in payments. Moreover, payments from some private players have also been in stress on dull demand in the market; it is quite risky to invest any fresh capital to stock inventories in such a situation.[/su_quote]
Traders in Chennai have also seen some difficulty in payments. A flat steel trader opined, [su_quote]The issue of payment settlements has aggravated in the fast 3-month, now the credit settlement period has almost doubled. Big players are able to settle their dues in time, whereas the companies in the small & medium space are finding it difficult pay in time.[/su_quote]
Experts believe that the issue is quite disturbing as it gauges the difficulties faced by the manufacturing industries in settling their payments. The lackluster demand in the market has dragged the trading volumes across major trading hotspots in India. But, difficulty in payment settlement is adding on to the woes of these traders and this is an emerging concern for the industry.
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