Steel industry agrees to hold prices beyond July

"The industry is with the government. Whatever is required to control inflation, would be done by the industry," Sajjan Jindal, vice-chairman and managing director of JSW Steel, told reporters after a meeting betweenthe industry and the steel ministry. Representatives of top producers such as Steel Authority of India (SAIL), Tata Steel, JSW, Essar, and Ispat attended the meeting.

 

The meeting was called by Steel Secretary R S Pandey to discuss the recent increase in prices of steel tubes and pipes despite a freeze on hot-rolled coil (HRC) prices, the main input. "Prices have gone up only for 5 per cent of the items, which are sold to traders. Nearly 95 per cent of steel is supplied directly to the consumers.

Prices have gone up as a result of hoarding and speculation," said Pandey. I P Jain, president of Federation of Industries of India, said that the federation will advise its members to reduce prices by 10 per cent. Steel tubes and pipes are now selling at Rs 53,000 a tonne. We will impose a cap of Rs 48,000 on their prices, he said.

Steel along with iron has a weight of 3.64 per cent in the wholesale price index (WPI). The WPI-based inflation for the week ended June 14 had touched a 13-year high of 11.42 per cent. Flat steel product prices have jumped 17-24 per cent since April last year, while long products such as bars and rounds have appreciated 50-60 per cent over the same period.

"We will reduce the direct and indirect export of HRC to ensure adequate domestic availability. It will have an impact on prices of cold-rolled coils and galvanised sheets as well.

A maximum retail price will be made effective so that no trader or stockist takes advantage of a supply shortage. Companies will display these prices on their websites and also advertise them through newspapers. We will also make available more stocks to small industries and consumers," said Jindal.

According to ministry's data, steel export in the first quarter of the current year was 900,000 tonnes, over 30 per cent lower than the 1.3 million tonnes exported in the corresponding quarter last year.

Jindal said that about 5 million tonnes of additional steel would be available in the market this year. "New capacities to the tune of 3 million tonnes will become operational, while another 1.5-2 million tonnes would be available as a result of lower export," he said.

"Our company has dealers in various districts who are supposed to sell at MRP. However, if any dealer is found violating it, we will suspend his dealership. We have another category of buyers who are not our dealers and are therefore not required to follow the MRP. We will work out a mechanism for them as well," said S K Roongta, chairman of SAIL, the country's largest steel producer.