JSW Steel today said it would not increase the price of the commodity after the agreed moratorium with the government ends on August 7.
“We are not going to increase steel prices, at least in this month,” JSW Steel Vice-Chairman and Managing Director Sajjan Jindal told reporters here.
The decision of the private company to hold prices emanates from the fact that global steel prices have softened by $100 per tonne in the last 15 days, Jindal said.
Lending support to the government in its fight against runaway inflation, now at 11.98 per cent, domestic steel makers had on May 7 promised to hold prices for three months.
On July 31, Jindal said that “certainly there will be some increase in steel prices from August 8” since the gap between the global and domestic steel prices had widened to the tune of $350 per tonne.
JSW Steel suffered a decline in its net profit in Q1FY09 to Rs 219.35 crore as against Rs 468.45 crore in the year-ago period on net sales of Rs 3,671.49 crore, still an increase by 54 per cent over the same period last year.
Jindal had attributed the dip in the company’s bottomline to the agreed moratorium. “The biggest factor for the dip in net profit is the moratorium between steel makers and the Government to tame inflation.”
“The government did not allow us to pass on the cost push to the finished product. Hence, we could not match global prices,” he had said, adding the government would appreciate the cost push and understand the situation this time. Asked whether JSW Steel has received any directive from the government to hold prices beyond August 7, Jindal said, “No”. Jindal said the company sells 40 per cent of its products through long-term contracts or exports, contracts for which were signed in April. As much as 34 per cent of sales were based on quarterly prices where the company has already effected a hike.
“Thus, even if we incur some loss in the remaining 26 per cent of our total produce in the retail market it will not have much impact on the company’s bottomline,” Jindal said, adding the company was also willing to support the Government in its effort to rein-in inflation, currently at 13-year high.
