Industry may go for moderate hike in steel prices

August 7th, 2008 - 6:30 pm ICT by IANS  

A file-photo of Manmohan Singh

New Delhi, Aug 7 (IANS) Steel producers may raise prices following the end of the self-imposed three-month moratorium on holding back of steel products prices Thursday. A steel ministry official said though the industry was in no hurry to go for a price rise, a “moderate hike” was a possibility.

“However, a moderate hike in steel prices cannot be ruled out in due course if inflation starts moderating. A lot will also depend upon how industry responds after their voluntary moratorium ends today (Thursday),” the official told IANS.

An industry analyst, who did not wish to be named, agreed.

“Going by the dynamics of industry, prices of steel products are required to be revised. The government is not against a price rise. But producers may not go for a steep revision of prices as the government is struggling with a double-digit inflation and they wouldn’t want to antagonise the government,” he said.

The analyst said there was chance that the steel ministry could give the green signal to the industry to adopt a dual pricing strategy, under which domestic prices would remain unchanged, and but export prices would be raised.

Steel Minister Ram Vilas Paswan had said at a function July 17 that the government was not against the interests of industry, and companies were free to revise prices, but in a rational manner.

“The government does not fix prices for steel products, and we do not want industry players to suffer in terms of profit at all. How much profit they should earn is the issue the company must look into before taking any decision,” Paswan had said at a steel industry conclave held here.

Steel manufacturers at a meeting with Prime Minister Manmohan Singh May 7 agreed to reduce prices of flat steel products by Rs.4,000 a tonne and that of structural steel by Rs.2,000 per tonne, and not to revise prices for the next three months.

The state-owned Steel Authority of India Ltd or SAIL has agreed not to go for an “immediate hike” in steel prices.

JSW Steel vice-chairman and managing director Sajjan Jindal Wednesday said there was no move to increase steel prices this month.

Finance Minister P. Chidambaram at an orientation programme for Congress spokespersons here Wednesday said he wanted the voluntary freeze on steel prices to continue.

He referred to Tata Steel and SAIL and said in the last quarterly results, both the companies have made profits.

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