Govt rules out intervention to hold steel prices

The minister's comments come a month ahead of the three- month time period given by steel majors to hold price line on the request of Prime Minister Manmohan Singh.     

"Government cannot intervene every time as steel rates are governed by international prices," Paswan told reporters when asked whether the government would yet again appeal major steel producers to hold prices for a few months more.      

In May leading steel makers had reduced prices of flat products by Rs 4,000 per tonne and that of rebars and structural steel by Rs 2,000 per tonne, endorsing government's concern that steel prices were exerting inflationary pressures on economy.      

The producers had also promised the government to hold their price line for three months till July. However, with raw materials prices shooting up, the steel players have already hinted that the rates may go up from August.      

Speaking on the sidelines of a seminar by MSTC, Paswan said prices of iron ore and coking coal, the two main raw materials for steel making, have significantly shot up in the global market in over the last one year adding to cost of production of domestic steel players.     

The minister said the government would not like the steel industry to close down for lack of profit, but would certainly monitor if prices have been upped in proportion to the increase in cost of raw materials.     
"The government has no problem as long as steel producers raised prices in proportion to hike in input costs," he said.