The Hindu : Business : Steel majors cut prices

Online edition of India's National Newspaper
Tuesday, Aug 24, 2004

Business

Business

Steel majors cut prices

By Indrani Dutta

KOLKATA, AUG. 23. Close on the heels of Tata Steel reducing product prices, India's largest steel producer Steel Authority of India Ltd (SAIL) too announced reduction in prices of its steel products.

Prices have been reduced by Rs. 1,000 a tonne for both flat and long products, a SAIL release said adding that it would be effective from today. Taking into account the impact of the excise duty and sales tax, the effective reduction to customers would be about Rs. 1,150 a tonne.

With a production of 12.7 million tonnes of crude steel, SAIL has a 25 per cent share of the Indian steel market, sources told The Hindu.

Commenting on the price reduction SAIL Chairman, V. S. Jain, said SAIL had all along been a strong believer in stabilisation of steel prices and has substantially reduced exports to make more steel available in the domestic market.

In the present scenario, price reduction by SAIL would have a positive impact on lowering domestic steel prices, he felt. "We hope that the benefit would get passed on to ultimate consumers and we shall review the position from time to time," he said.

The Chairman and Managing Director of Rashtriya Ispat Nigam Ltd (RINL), a significant player in the construction steel segment told The Hindu that they were at present working on a price reduction proposal. Industry experts said that the upward price spiral which was set off in the second-half of 2002 led to an increase of nearly Rs. 10,000 a tonne in segments such as cold rolled coils which find application in products such as pipes, automobiles, white goods, drums and barrels. Both the public and the private sector account for the majority of the production in this segment and both had increased prices substantially.

"Ex-Kolkata prices of cold rolled coils which stood at Rs. 19,500 a tonne in July 1999 had increased to Rs. 26,000 by June 2004," they said.

The price spiral was evident in respect of long products too and this had impacted projects as well as the construction sector very badly triggering inflation, informed sources said.

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