The Hindu Business Line : Steel Ministry not to intervene on pricing issue, says Paswan

The Union Minister for Steel, Chemicals & Fertilisers, Mr Ram Vilas Paswan, flanked by the Chairman of CII National Committee on Petrochemicals & Managing Director of Haldia Petrochemicals Ltd, Mr S.K. Bhowmik (right), and the Advisor, Reliance Group of Companies, Mr K.G. Ramanathan, at a petrochem conference in Mumbai on Tuesday. —

Our Bureau

Mumbai, March 4 The Union Steel Minister, Mr Ram Vilas Paswan, has ruled out any intervention by his Ministry in the steel pricing issue, as the last time it intervened it had drawn flak from various quarters.

“The last time we had called for a meeting with steel producers (which resulted in the steel makers reducing price by Rs 500 to Rs 1,000 per tonne last month) there had been some criticism. I will not call for another round of meeting. I leave it to them (producers) to decide on price hikes based on market conditions,” he told reporters on the sidelines of the International Petrochem Conference that began here on Tuesday.

The Steel Ministry had called for three meetings in the recent past with steel producers, with the last two resulting in price cuts of about Rs 2,000 and Rs 1,000 per tonne respectively.

Mainly private players

He said such interventions were not good for the “industry’s health”. Also, it tended to send a “signal” that the Government wanted to interfere, he said, adding that in any case State-owned steel producers accounted for only 30 per cent of the domestic steel production and the rest was from the private sector.

Mr Paswan, however, warned that if the steel makers hiked prices “unreasonably”, the Ministry could step in. He said the Ministry had a benchmark ratio that indicated the maximum hike that the producers could make, given the prevailing cost of key inputs and other market conditions. “If the prices go over this limit, we will have to intervene. We have a committee, which closely monitors steel prices,” he said.

Impeding issues

Asked about the steel expansion projects underway in the country, the Minister said there was a mismatch between the growth in demand and the pace of implementation of the expansion and greenfield projects. Plans were afoot to set up a high-power committee that would look into various aspects that were impeding speedy implementation of the projects, such as land acquisition, allocation of mines and environmental clearances.

On the issue of iron ore export, Mr Paswan reiterated that it was essential that iron ore demand be first met locally, before it is exported. In this connection, he wanted the Ministry of Mines to chalk out a long-term estimate, indicating how much ore India could exploit and what would be the demand in the next 10 to 15 years.

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