The Hindu Business Line : Price hike: Govt to meet steel producers again

New Delhi, Feb. 12 The Government will be holding a meeting with major steel producers in the next couple of days again on the issue of increase in prices.

“The discussions that we had today were very fruitful and we will be meeting again in the next two to three days,” Dr J.S. Sarma, Secretary, Steel, told reporters after a meeting here on Tuesday.

The Government had termed the price hike by steel companies, which was up to Rs 2,500 rupee per tonne across various products, as unreasonable. “The price monitoring committee in the Steel Ministry has already been instructed to look into the recent hike by the domestic steel manufacturers,” Union Minister for Steel, Chemicals and Fertilisers, Mr Ram Vilas Paswan, recently said.

‘Rollback unlikely’

However, industry sources said that the demand of a roll back is unlikely as the input prices in the last couple of months have gone up.

“There would be no rollback in the prices unless the Steel Ministry asks iron ore miners such like National Mineral Development Corporation (NMDC) and Kudremukh Iron Ore Company (KIOCL) to roll back their price hikes,” an industry source who attended the meeting told Business Line.

He also said that only a partial burden has been passed on to the consumers. “The price increase in January and February were only to recover Rs 3,000 per tonne cost of the total increase which is ranging between Rs 6,500 and Rs 8,000 per tonne on different products,” he added.

Another official who attended the meeting said that the Government appeared more concerned on the increase in the prices of long products which directly affect the consumers rather than on flat products.

‘Hike justified’

Justifying the hike, producers have said that port congestion charges have gone up from 21 per cent to 60 per cent in December last year.

“Also the inland freight charges have gone up by 65 per cent in the last one year from Rs 650 per tonne to Rs 1,250 per tonne.

“This apart the iron ore prices have touched $150 in December from $59 in February last year and coal prices have gone up by more than 200 per cent the last eight months,” they said.

Major producers also pointed that even if there is a roll back in prices, there is no guarantee that dealers would pass it on to the consumers.

“The Government basically has control on the major producers only, the secondary producers fix prices based on the market conditions and there is no mechanism to check at what prices the commodity is being sold,” the producers pointed out.