The Hindu Business Line : SAIL tests dual pricing system to up realisation

New Delhi, Aug 4 After private sector steel manufacturers increased their contractual prices last month, public sector Steel Authority of India Limited (SAIL) is now adopting a dual pricing policy to enhance its realisation, according to market sources.

According to market sources, customers who have a memorandum of understanding with SAIL for assured volumes are being told that they will get 40 per cent of their quota at the notified price of Rs 36,000/tonne.

For the remaining 60 per cent, SAIL is asking its buyers to give a letter of consent stating that they are prepared to accept 60 per cent of their supplies at Rs 49,500/tonne.

This will take SAIL’s average price realisation to around Rs 44,700/tonne, as against Rs 46,000/tonne being charged by some private sector producers.

SAIL officials, when contacted, declined to comment on pricing issues.

Sources said since the Government has signalled SAIL not to increase prices, in a market where the rival producers sell at a price higher by Rs 10,000/tonne compared to SAIL’s prices, the company is trying to make up for the losses by catering to priority customers who will be ready to pay a premium for timely supplies.

The customers can also forgo their quota, sources said.

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