The Hindu : Business : Steel makers to hold price for one month

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Friday, Apr 06, 2007
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Steel makers to hold price for one month

Special Correspondent

To help the Govt. in containing inflation

— PHOTO: PTI

POSITIVE RESPONSE: Sajjan Jindal (left), Vice-President, Assocham Steel Committee, talking to other industrialists after their meeting with the Union Finance Minister, P. Chidambaram, in New Delhi on Thursday. — PHOTO: PTI

NEW DELHI: In a move to help the Centre rein in inflation, steel producers on Thursday assured Finance Minister P. Chidambaram that they would not raise prices this month even though input costs were on the rise and affecting their margins.

At a meeting with Mr. Chidambaram and other top Ministry officials here, the steel industry magnates, however, stressed that the export duty on iron ore at Rs. 300 a tonne, as announced in the budget for 2007-08, should stay, the raw material being a critical input for the sector.

Speaking to newspersons after the meeting, the Senior Vice-President of the Associated Chambers of Commerce and Industry of India (Assocham), Sajjan Jindal (of the Jindal Steel group), said: "We will not increase the prices for the month of April, but will review the situation next month."

Mr Jindal noted that even though input costs such as railway freight and bank credit had gone up and holding the price line for the month would affect profitability, the steel industry's decision to freeze prices was meant to help the Government in containing the inflationary spiral.

"It is not the Finance Minister alone who should be worried about inflation. Steel is the big item in the wholesale prices-based inflation. We have to support the Government to fight inflation," Mr. Jindal, who is also Vice-Chairman and Managing Director of JSW Steel, said. Apart from Mr Jindal, the delegation, comprised representatives of Tata Steel and Steel Authority of India Ltd. (SAIL)

Interestingly, the industry's assurance to Mr Chidambaram has come a couple of days after indications of an imminent hike in the prices of steel owing to a supply-demand mismatch in select products during the last few weeks. In fact, the primary steel producers had announced a hike in prices immediately after the presentation of the budget, but rolled it back on the request of the Government.

Having remained unchanged for three consecutive weeks at 6.46 per cent, the rate of inflation slipped marginally to 6.39 per cent for the week ended March 24, still at a much higher level than the "comfort" levels of 5.0-5.5 per cent. Earlier in the day, the delegation met Home Minister Shivraj Patil who heads a Group of Ministers (GoM) on mining.

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