The Hindu : Business : ‘Cut steel prices if rates fall globally’

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‘Cut steel prices if rates fall globally’

World demand has come down from infrastructure sector

Producers are holding the price
line for over three months
Gap between domestic, international
prices has reduced

NEW DELHI: The Union Government on Friday asked steel producers to slash prices as and when there was further softening of rates in the global markets.

“Global steel prices have already softened and if the trend continues, it calls for a reduction in the domestic market too,” Steel Secretary P. K. Rastogi told reporters here.

Globally, demand of steel has come down, especially from the infrastructure sector, resulting in a dip in prices. “The gap between domestic and international steel prices has reduced. They have not come at par. If the gap narrows down further, we may look at revising our prices downward,” SAIL Chairman S. K. Roongta said, adding that as of now the PSU was maintaining the price line.

The domestic steel producers have been holding the price line for over three months now to help the government check spiralling inflation. Mr. Rastogi said steel prices were maintained by the producers and added that if there was a hike, the government would step in.

“The Government has options, we will examine the case if the prices are increased,” he said.

On the issue of long-term supply contracts, the Secretary said the Government is seeking a long-term agreement between the steel producers and miners to ensure supply security and check against price volatility.

When asked about the reported increase in retail prices of steel, in spite of government’s efforts, Mr. Roongta said, “SAIL has a network of dealers at the district level. They are maintaining the price line.”

When asked if the contribution of the commodity in the Wholesale Price Index (WPI) has increased in the last one week as inflation peaked to 13-year high of 12.63 per cent, the Steel Secretary said, “The inflation was higher this week. Steel contribution to inflation has remained constant for the past two weeks.”

Steel prices have a weightage of about seven per cent in the Wholesale Price Index (WPI). — PTI

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