The Hindu Business Line : Steel firms answer Govt’s call, slash prices by up to Rs 4,000/t

Inflation check: The Prime Minister, Dr Manmohan Singh, flanked by the Finance Minister, Mr P. Chidambaram; and the Steel Minister, Mr Ram Vilas Paswan; with steel manufacturers (from right) Mr Sajjan Jindal (Vice-Chairman & MD, JSW Steel Ltd), Mr B. Muthuraman (Managing Director, Tata Steel), Mr S.K. Roongta, (CMD, SAIL), Mr Vinod Mittal (Vice-Chairman & MD, Ispat Industries), Mr Anil Sharma (Director Corporate Development, Ispat), Mr Shashi Ruia, (Chairman, Essar Group) and Mr Prashant Ruia (Managing Director, Essar Steel) at a meeting in the Capital on Wednesday. —

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New Delhi, May 7 The steel industry on Wednesday responded to the Prime Minister’s call for cooperation in controlling inflation by agreeing to reduce prices of all primary steel products.

Producers who had increased prices in April this year will cut prices of flat steel by Rs 4,000 per tonne while in the case of long products like re-rolled bars and other structural products, prices would be reduced by Rs 2,000 per tonne. The cuts take effect immediately.

The Government, on its part, will keep the proposed export duty on steel in abeyance and will not notify it.

These decisions emerged out of a high-level meeting convened by the Prime Minister, Dr Manmohan Singh, with the steel industry here on Wednesday. The Finance Minister, Mr P. Chidambaram, and the Steel Minister, Mr Ram Vilas Paswan, were also present at the meeting.

From the steel industry, the Steel Authority of India Chairman, Mr S.K. Roongta; the Essar Steel Chairman, Mr Sashi Ruia, and Managing Director, Mr Prasant Ruia; the Ispat Industries Vice-Chairman, Mr Vinod Mittal; the Tata Steel Managing Director, Mr B. Muthuraman; and the JSW Vice-Chairman, Mr Sajjan Jindal, attended the meeting.

Briefing reporters later, Mr Roongta said, “We endorse the Government’s concern on steel prices contributing to inflation. Major steel producers have decided to reduce prices of flat products by Rs 4,000 per tonne and prices of rebars and structural steel by Rs 2,000 per tonne and hold these prices for next three months.”

“We apprised the Prime Minister that prices of raw materials have shot up to very high levels, leading to increase in cost of production,” he added.

Mr Mittal said that “the Government has assured that the notification for the proposed export duty on steel would be put on hold and they will not implement it.” He, however, pointed out that though the revenues of the companies would be hit due to the price cut, their expansion plans would net be affected.

Mr Muthuraman said that the industry has also sought imposition of an ad valorem duty on iron ore exports. “We demanded a 15 per cent ad valorem export duty on iron ore in order to conserve the mineral for meeting our expansion plans,” he said.

Mineral makers

“We have also requested the Prime Minister to ask mineral giants NMDC and Manganese Ore India Ltd (MOIL) to reduce their prices which are crucial inputs for steel making and that these PSUs should accord priority to domestic producers before undertaking exports and charge long-term international prices,” Mr Muthuraman said.

The private steel producers had increased steel prices in two phases in April including a raw material surcharge of Rs 5,000 per tonne. However, public sector SAIL had not imposed any raw material surcharge. This reduction by private producers would bring parity in prices of SAIL and other producers.

This price reduction would not be applicable on exports or negotiated prices. It would also not be applicable where the end product is exported as value added steel.

Seeking Government cooperation, the steel makers pointed out that auctioning of manganese ore and iron ore by MOIL and NMDC was attracting speculative prices in the domestic market and demanded that it should be stopped.

The Prime Minister has said that the concerned administrative Ministry will decide on this matter, the producers said.

Call on freight

The industry also urged stabilisation of railway freight on steel-making raw materials and on steel products be maintained at current classification.

The producers also suggested to the Prime Minister that in order to facilitate investment in the steel sector and to augment capacities in the country, the allocation and renewal of iron ore and coal mines be ensured on priority basis.

They said allotted natural gas should be made available to the industry and all legal, environmental and forestry clearance issues be resolved by setting up an Empowered Committee if needed.

The steel makers also requested Dr Singh to consider appropriate reduction in excise duty on steel and assured that any cut would be passed on to the consumers.