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Steel producers to hold the price line

NEW DELHI: Domestic steel giants SAIL and Tata Steel’s decision to hold prices at current levels for the next 2-3 months, a gesture to help the government fight inflation, has prompted JSW and Ispat too to offer to keep prices intact for the same period.

“We appreciate the concern of the Prime Minister on the importance of the steel sector vis-a-vis inflation in the country. Considering the government’s concern about inflation, Ispat has no intention to increase steel prices till June 2008,” the Mumbai-based steel maker said in a statement.

The company reminded that its domestic steel prices were much lower than prevailing international prices despite a massive increase in input costs mainly on account of high iron ore, pellets, coal, coke and logistics costs.

Another leading utility JSW’s Vice-Chairman and Managing Director, Sajjan Jindal, said his company would hold on to the price line for the next 2-3 months.

Gujarat-based Essar Steel too said it shared the government’s concern on prices and was willing to consider maintaining prices. “Though the domestic prices are lower than the international prices, we can consider maintaining the prices and we request the government for allocation of gas and iron ore on a priority basis,” a company spokesman said. Prime Minister Manmohan Singh on Tuesday asked the steel industry not to manipulate the market for short-term gains.

Steel prices have risen by up to 49 per cent in the last 12 months, partly causing headline inflation to surge to a three-year high. “I would advise our steel industry to take a long-term view and not fall prey to the temptation of seeking windfall gains from market manipulation in a period of excess demand,” the Prime Minister had said.

Shortly after Dr. Singh’s statement, Tata Steel said it would hold the prices of its steel products at current levels for the next 2-3 months.

SAIL too announced that it would not increase the prices of its steel products for the next two-three months. Meanwhile, pressure continued to mount on the steel producers with the Planning Commission warning that the Competition Commission could initiate action against them in case they do not lower prices.

MRTPC was conducting an inquiry into the allegations of cartelisation, Finance Minister, P. Chidambaram said, adding that the government was looking at legal and administrative provisions that were available to it. — PTI

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