CII demands reallocation of oxygen for steel, ferrous industry

Lucknow / May 24, 2021

With the medical oxygen demand by Covid-19 hospitals starting to stabilise, the Confederation of Indian Industry (CII) has demanded the central and state governments to reallocate the commodity for the continuous manufacturing industries such as steel and ferrous plants.

Last month, the government had ordered for diverting oxygen supply from the industrial sector to medical use amid growing demand for liquid medical oxygen (LMO) following a steep rise in the coronavirus cases across India.

Recently, the union home ministry & Department for Promotion of Industry and Internal Trade (DPIIT) have allowed oxygen supply to certain ferro alloy manufacturing units. Now, the CII is seeking an urgent revocation of the ban on supply of oxygen to industry.

According to the CII, while the pandemic had crippled various sectors, primarily hospitality and retail, many of which were on the brink of closure, it had severely impacted the steel and ferrous industries, which are continuous process industries, and although not in large quantities, do need industrial oxygen.

In line with the central and state government directives, these plants, which were using oxygen for their purifying liquid stainless steel, had surrendered oxygen cylinders to allow the diversion of the commodity for medical use.

Consequently, they have had to cease their operations for more than a month making it difficult for them to sustain their employees, many of whom are migrant workers. “But now the number of fresh (Covid) cases has dropped significantly owing to efforts of the Centre as well as the state governments,” the CII noted.

“We are receiving requests from industries especially the manufacturers and exporters of stainless steel who use oxygen to purify liquid stainless steel but do not have their own oxygen plant. They are also bearing heavy fixed charges of electricity. These manufacturers employ thousands of people, and are currently bearing heavy losses, are on the verge of closure,” CII Uttar Pradesh State Council chairman C P Gupta lamented.

Recently, MSME chamber Indian Industries Association (IIA) had also suggested the Yogi Adityanath government to allow for balanced allocation of oxygen for industrial and medical uses in the backdrop of the demand for LMO easing.

Besides, IIA demanded that in wake of the rising domestic steel prices and diversion of oxygen to hospitals, the government should notify steel under the Essential Commodities Act to insulate the manufacturing sector from the impact of the upsurge in prices.

The prices of iron and steel, copper, aluminum, plastic and rubber have increased significantly in recent weeks as compared to last year, while the entrepreneurs are in dire need of additional capital to keep businesses afloat following the Covid-19 induced lockdown matrix.

Despite muted domestic demand owing to lockdown, the steel price hike is primarily a fall-out of the international price movement, which has been ticking northwards after China restricted its exports.


(Virendra Singh Rawat is a Lucknow based journalist, who writes on contemporary issues of industry, economy, agriculture, infrastructure, budget etc)