Steel prices hit wagon manufacturers
High input costs have prompted a few of them to cut back on production and scale up once prices start going south
Wagon manufacturers want the government to intervene after primary steel producers raised prices by at least Rs 1,000-1,500 per tonne despite the Centre lowering the import duty on various steel products in the Union budget.
Steel is a major raw material to make wagons. High input costs have prompted a few manufacturers to cut back on production and scale up later once prices start going south.
While certain contracts of Indian Railways with wagon makers have price variation clauses, these do not cover short-term fluctuations in prices. Moreover, non-government contracts and export orders which are highly competitive may not always have such clauses. As a result, a spike in steel prices directly impacts wagon manufacturing.