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Govt to meet steel producers over prices by mid-May

Leading producers like SAIL, Tata Steel and Essar Steel have increased prices in the last two months

Press Trust of India  |  New Delhi 

Expressing concerned over rising steel prices, the government today said it will call a meeting of by the middle of next month to review the pricing scenario.

"Steel prices are high, we are concerned on it. We will review it and will call a meeting of steel companies in next 15-20 days after (the current session of) Parliament is over," Steel Minister Beni Prasad Verma reporters here on the sidelines of a CII Steel Summit.

Leading producers like SAIL, and have increased prices in the last two months, particularly for long products, largely used by the construction industry.

Early this month, the steel makers had raised prices for both long and flat products by up to Rs 1,500 a tonne, to partially offset the higher production costs due to hike in freight rates.

Currently, the price for long products are hovering between Rs 39,500 and Rs 41,000 a tonne, while cold-rolled coils' cost Rs 44,500 a tonne.

Responding to queries over pricing, Chairman C S Verma said: "Demand is very good, I will say that but the hike or what ever the price levels are decided by the demand and supply forces."

The last price hike came after Railways hiked freight charges in March first week that impacted the cost of transportation of iron ore by up to Rs 1,400 a tonne.

Besides, hike in excise duty in the Budget to 12% from 10% earlier also impacted the cost by up to Rs 1,000 per tonne.

However, an industry official said impact of freight increase and excise duty has not been passed on fully to the consumers in last price increase, effected early this month.

In general, the hike the prices at the beginning of the month analysing the demand-supply situation and the absorbing capacity of the market.

Long products are used in construction sector and flat products are used in the making of cars and consumer durables.

First Published: Mon, April 30 2012. 19:27 IST