Govt appeals steel makers to retain steel prices

The government on Wednesday has appealed to steel makers not to hike the prices of steel viewing the current global price, as the pledging period of steel makers is going to end on August 07 in which makers had ensured the government to reduce the prices of flat steel in account to help the Centre in taming inflation.

The Steel Ministry has also warned the flat steel retailers and distributors not to hike the prices of steel viewing the rising demand in the market. Despite of slashing the prices of steel on bulk level, the retailers did not decrease the prices.

Addressing to steel dealers and traders on Wednesday at Indian Steel Conclave 2008 in the capital, Union Steel, Chemical and Fertiliser Minister Ram Vilas Paswan warned, “I have noted with concern that certain dealers and traders have sold flat steel products at higher than market prices, taking advantage of the high demand in the retail market.” The meeting was convened by Federation of Indian Chambers of Commerce and Industry (FICCI) and Ministry of Steel.

Paswan has also added that Steel Ministry has already directed Public sector and Private sector companies to prohibit any sort of malpractices. “We will take up and deal very severely with such market manipulations. We have already directed the PSU steel companies to keep a strict watch on such malpractices and I request the other producers to keep a similar watch on their retail and distribution network,” Paswan added.

However, he appraises the steel manufactures to keep their promises. Steel producers had assured the government on May 07 to slash the prices of flat steel product by Rs.4000 and to hold it for the period of four months.

But the steel makers are likely to disagree with the government’s appeal, as they are planning to raise the prices of flat steel, as per sources.

Tata Steel Managing Director B. Muthuraman said, “There is every justification for increasing prices because input prices have gone up.” At present steel producers are distributing the flat steel to distributors and retailers at the lesser rate of Rs.15,000-20,000 per tonne than the global rates.

Muthuraman announced this statement in the same conclave and in response the Steel Ministry said that the government could not pressurize the manufacturers every time to reduce the prices.

"Steel is in the de-control sector and so the government cannot interfere every time. But since India is a welfare state, government ought to safeguard the public interest,” Paswan said.

Indicating India’s target in steel production, the Steel Minister Ram Vilas Paswan said that India has projected the target to achieve the third position in 2012 by producing 124 million tonnes of steel while it would cement the second position after China in 2020 by achieving the projected target of 243-million capacity.

At present, India’s public and private sector companies are cumulatively producing 59-million tonnes of steel. Steel Authority of India Limited (SAIL), Rashtriya Ispat Nigam Limited (RINL), Tata’s Tata Steel, Essar, Jindals’ JSW Steel Limited and JSPL (Jindal Steel Power Limited) are some of the major players in the steel sector.