The Hindu Business Line : Panel report on steel pricing policy ‘by month-end’

Chennai, Sept. 17 Concerned over the volatility of primary steel prices in the domestic market and allegations made by the consuming industry against the manufacturers, an independent panel, headed by the Chief Economist of the Joint Plant Committee (JPC), Ms Suchitra Sengupta, has been assigned the task of formulating an adoptive model to help the Government decide on steel pricing policy.

The Steel Ministry is of the view that exports below domestic prices would not be allowed.

The steel consuming industry has been complaining that Indian steel manufacturers are exporting at prices lower than domestic prices.

“We are examining this point and are trying to submit the report to the Government by the end of this month or in the beginning of October,” Ms Sengupta told Business Line.

Sub-committee

The committee has been formed as a sub-committee of the Steel Price Monitoring Committee (SPMC) under the Ministry of Steel that has representation from the steel makers, steel consumers and the Government. The JPC Chief Economist is the coordinator and there is one representative each from steel consumers and steel manufacturers.

“We have already submitted a report on the preliminary findings to the Government based on data available with the JPC. According to initial findings, the realisation from domestic sales are higher compared to that from exports.

“But in order to be doubly sure we are now using data from the Directorate General of Commercial Intelligence and Statistics (DGCIS) before giving the final report ,” Ms Sengupta said.

In view of the wide range of steel products that are manufactured in India, the committee is adopting a comprehensive approach and is examining the overall price realisation from domestic sales vis-a-vis export earnings.

Comprehensive approach

“We are taking the total export earnings from all types of steel products for the whole year and dividing it by 12 to derive the monthly figure and then making adjustments for export incentives and freight costs. The same exercise is repeated with domestic earnings and then comparing them,” she said.

The committee has also faced difficulties in obtaining data regarding prices and actual cost of manufacturing from both the primary and secondary steel manufacturers which has lead to adopt this macro model, Ms Sengupta pointed out.