Steel makers try to allay supply, pricing fears

Hot rolled coil producers, represented by the Indian Steel Alliance (ISA), and downstream users, including automobile companies, automobile component producers and cold rolled steel producers, today decided to work together on various issues relating to the availability and pricing of steel.

This decision was reached after ISA first held a meeting with the Society of Indian Automobile Manufacturers (SIAM) and Automotive Component Manufacturers Association (ACMA) and then with the Cold Rolled Steel Manufacturers Association.

Sunil Kant Munjal, vice-president, Confederation of Indian Industry (CII), told the media that the steel industry had assured that it would meet the domestic demand for hot rolled coils and local demand would be given priority over exports.

Also, to control frequent changes in steel prices, members of the ISA would enter into quarterly, six-monthly or even annual contracts with their customers, provided that both sides honour prices and commitments during the period of the contract, he said.

Jamshed J Irani, Chairman, ISA, said steel makers would hold the current prices of hot rolled coils till the end of June, after which it would be reviewed.

He said price stability was the most important factor and that international steel prices had shot up to about $500 a tonne from $180 a tonne previously.

Besides, input prices like iron ore, metallurgical coke and freight costs have also increased, which has led to a higher cost of production.

The ISA also agreed to give special consideration to the needs of small and medium enterprises by meeting their aggregated demands for hot rolled coils, subject to a minimum quantity.

It was also decided that a committee, comprising two members each from SIAM, ACMA and ISA, would be formed to exchange information, discuss issues and problems on a continuous basis.

CII would be the Secretariat for this group. The three sides also agreed that the presidents of ACMA and SIAM and the Chairman of ISA, along with a group of members, will make quarterly reviews.

Prices of hot rolled coils had surged from Rs 23,000 per tonne to Rs 27,000 per tonne in February. However, an excise duty cut and various Customs duty benefits have led the five major steel makers to reduce prices of hot rolled coils by Rs 2,000 a tonne .

Soothing steel concerns

• The steel industry has assured that it will meet the domestic demand for hot rolled coils and local demand will be given priority over exports
• Steel makers also agreed to enter into quarterly, six-monthly or even annual contracts with their customers
• They have also agreed to provide special consideration to the needs of small and medium enterprises