Steel makers to hold price line
Steel Manufacturers have
given assurance to Union Finance Minister P Chidambaram that they
will be holding on to the price line for another month. At the same
time they have pleaded that the Rs 300 a tonne export duty on iron
ore should not be rolled back. “We will not increase the prices for
the month of April, but will review the situation next month,”
Sajjan Jindal, Vice Chairman and Managing Director of JSW Steel and
President of Institute of Steel Development and Growth (INSDAG)
said. He said input prices of steel like railway freight and
finances have gone up of late and the industry’s decision to hold
the price line would strain its profitability, the industry decided
to hold the price line to help the government tame the rising
inflation. However, officials in Steel Authority of India Ltd said
“though there is no price hike, the net cost that the buyers would
have to pay now has increased since the rebates have been slashed by
40 to 50 per cent.” According to SAIL sources, in the case of long
products, rebates had been slashed by an average of 40 per cent
since these products have high usage in construction and
infrastructure projects. In rupee terms, this would mean that the
effective price would be going up by Rs 400-500 per tonne. “Add to
this a 10 per cent increase in railway freight because of their busy
season freight policy. This would mean another Rs 200 to Rs 250 per
tonne and the total increase would be in the range of Rs 600 to Rs
700 per tonne,” SAIL sources said. In the case of flat products, the
rebates have been slashed by an average of 50 per cent, which is
again around Rs 400-500 per tonne and with increased freight rates,
the net impact would be around the same level as in the case of long
products, SAIL sources said. At the same time cold rolled steel
manufacturers are up in arms and said that some of the companies had
already informed them about the price hike. Says the Executive
Director of Cold Rolled Steel Manufacturers Association (CORSMA), Mr
S. C. Mathur: “the primary manufacturers have again increased the
prices and do not heed to any requests even from the highest levels
of the Government. While Indian companies are the lowest cost
producers in the world with an average production cost ranging
between $350-400 per tonne, they are selling in the domestic market
at $630-640 per tonne while exporting at a much lower rate of $550
to 570 per tonne.”
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