The Association Of Indian Forging Industry (AIFI) has urged the Centre to ban exports of steel and iron ore due to high prices which are hampering the growth of India's forging industry.

The association cited the Covid-19 disruption as a major factor that has affected the automobile industry, thereby the component suppliers and hence, the forging industry.

"While the industry was reviving post the pandemic, the increase in steel prices has hammered the forging industry in India," the association said.

"Forging steel manufacturers have hiked the price by 10 per cent over the last six months, and have now sought a further 15 per cent increase... the initial increase itself was all but impossible to sustain, the further increase will prove to be disastrous."

Steel is the basic raw material for the forging industry and typically constitutes 60 to 65 per cent of the ex-factory value of forgings.

"With these two increases, this (ex-factory value of forgings) is expected to rise to around 75 per cent, with such an increase in percentage of the input cost, survival of the industry has become challenging," the association's statement said.

According to AIFI, at the present moment, the prices of steel are at unprecedent highs.

"Increased demand amid low allocation of production for the domestic market coupled with minimal imports due to import restrictions imposed by the Government of India, domestic steel manufacturers have increased the prices twice in the current quarter for forging quality steel..."

"... and three times in the current month for other types of steel, bringing the benchmark hot-rolled coil prices in the wholesale market (ex-Mumbai) to Rs 52,000 per ton from only 36,500 per ton in July, that's a rise of 43 percent, an indicator that the prices of forging quality steel will be further revised upwards in the immediate future in line with the increases in the prices in 'Hot Rolled Coil' prices."

As per the statement, price increases of steel in the domestic market are due to the increase in exports to neighboring countries and resultant reduction in supply within the domestic market has resulted in Indian prices, moving contrarian to the prices of steel in the European and American markets.