Steel ministry hardens to bend prices

Concerned over prices of various steel products rising by 10 per cent, steel ministry is going to ask the producers...

Concerned over prices of various steel products rising by 10 per cent, steel ministry is going to ask the producers on Thursday to correct market distortions and do some plain-speaking with their retailers to pass on the benefits of the frozen price line to the end-consumers. If the producers fail to hold the line, the ministry will examine ways to control the prices.

“After monitoring the pricing trends, we found that steel prices have shot up by 10 per cent in the retail market in June which is a matter of concern to us. We are told that prices are rising at the dealers’ level. But the leading producers will have to step in to to ensure that end users are benefited. If prices do not come down that government will have to examine ways to contain them,” steel ministry secretary Raghav Sharan Pandey told The Indian Express.

Captains of all big steel companies are expected to attend the meeting on July 3 and discuss the issue with the ministry’s top brass. Primary steel producers such as SAIL, Tata Steel, Ispat Industries, Essar Steel, JSW Steel, RINL and JSPL had met Prime Minister Manmohan Singh on May 7 and conveyed their decision to reduce prices of flat steel products by Rs 4,000 per tonne on the products sold in the domestic market with immediate effect and hold on to the new price line for the next three months. Making it clear that the steel utilities cannot escape from the responsibility of the recent rise in prices, Pandey said that the companies were capable of making their dealers directly accountable for the price rise.

Meanwhile, anticipating a major intervention from the government on spiralling prices, steel producers have already begun expressing their concern on the entire situation. Some of them are understood to have already told the ministry that they would speak to the dealers. The producers expressed their readiness to initiate measures to contain prices including restricting supply to secondary producers for exports, increasing further supply for domestic sale, compelling retailers to sell steel products at reduced prices, preventing retailers from hoarding and charging high prices besides continuing to exercise self-restraint on exports. “As a result, retail prices of HR coils would come down,” sources said.

•Steel prices have shot up by 10 per cent in the retail market in June

•If primary producers such as Tata Steel, JSW and RINL have not increased prices, the rates should not have gone up in retail as well

•Prices are actually rising at the dealers’ level