Indian steel makers agree to lower prices

May 7th, 2008 - 11:29 pm ICT by admin  

A file-photo of Manmohan Singh

New Delhi, May 7 (IANS) Steel producers in India have agreed to cut prices after Prime Minister Manmohan Singh met them here Wednesday and sought their help in bringing down prices that have pushed the country’s inflation rate to a 42-month high. At the meeting, the steel producers, who account for over 60-percent of the country’s output, agreed to lower prices of products by between Rs.2,000 and Rs.4,000 per tonne with immediate effect, an official statement said.

“These reductions would be applicable for all steel that gets consumed in India either directly or after further processing. Further, steel producers will hold these prices for the next three months,” the statement added.

The companies represented at the meeting included the state-run Steel Authority of India, Tata Steel, Rashtriya Ispat, Essar Steel, Ispat Industries and Jindal Steel and Power.

The meeting came against the backdrop of India’s annual rate of inflation rising at a 42-month high of 7.57 percent for the week ended April 19, prompting policy makers to look at both monetary and administrative measures to rein in prices.

Prices of flat steel products have been reduced by Rs.4,000 per tonne by producers who hiked their prices in April, while prices for bars and structurals, for which no hike was effected in April, have been lowered by Rs.2,000 per tonne.

The producers also put forward some proposals for the government’s consideration, including for lifting export duty on steel products, and allocation and renewal of iron ore and coal mines for them on priority.

“Allotted natural gas should be made available and the legal environmental and forestry clearance issues be resolved by setting up an empowered committee, if required,” their proposal to the government said.

“An ad valorem duty of 15-25 percent be imposed on export of iron ore in order to conserve the mineral as China is doing in respect of coke, in which case 25 percent ad valorem export duty has been levied.”

This apart, they also wanted state-run coal firms to reduce prices and give priority to domestic steel producers for supply of inputs before undertaking exports. They can charge long-term international prices, if they so desire, their proposal said.

“The prime Minister appreciated the gesture of the steel industry in reducing the prices and assured them of expeditious examination of their proposals,” the statement said.

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