The Hindu : Business : Unorganised sector blamed for steel price hike

Online edition of India's National Newspaper
Wednesday, Aug 18, 2004

Business

Business

Unorganised sector blamed for steel price hike

By Our Special Correspondent

NEW DELHI, AUG. 17. With inflationary concerns paramount, the Union Finance Ministry has had a meeting with steel producers, including Steel Authority of India Ltd. (SAIL) and Tata Iron and Steel Company (Tisco), to take stock of the situation.

Sources in the steel industry said that at the meeting last weekend, producers and representatives of the Indian Steel Alliance briefed the Finance Secretary, D. C. Gupta, about the price situation and put the blame on the unorganised sector, saying that none of the manufacturers had increased prices of flat products for the last five months.

The industry representatives pointed out that in the case of long products, used essentially in the construction sector, about 70 per cent of the production was accounted for by the secondary producers and not the organised sector.

Industry representatives also told the Finance Secretary that there was no shortage of flat products as the production from the five manufacturers at 13 million tonnes was much more than estimated domestic requirement of about 10 million tonnes. It was mentioned that flat products, used mostly in the consumer goods segment by auto and white good industry, had not added to the inflationary pressures contrary to the impression generated otherwise.

However, the five top producers had no control over prices in the long product category as only SAIL and Tisco were in such production and accounted for only 30 per cent of the supply, the rest coming from secondary producers. Prices in this category had increased from about Rs. 22,000 a tonne to Rs. 27,000 a tonne in the last five months while flat product prices have remained unchanged since March this year.

Printer friendly page
Send this article to Friends by E-Mail

Business