Government hints at steps to stabilise steel prices

September 1st, 2008 - 5:25 pm ICT by IANS  

New Delhi, Sep 1 (IANS) With economic growth slowing down and inflation soaring, the government Monday hinted at more measures to stabilise steel prices.At a function here Monday, Steel Minister Ram Vilas Paswan said the government was committed to initiating further steps to contain steel prices, if needed.

“The government has taken certain measures to stabilise prices of steel, and is committed to taking further steps if the need arises,” Paswan said.

Paswan’s assertion once again reflected the government’s unwillingness to allow steel firms to go for an upward price revision after their three-month voluntary moratorium on increasing prices ended Aug 7.

What holds the government back from giving the go-ahead to the industry players for an upward price revision is the slow down in the economy, which logged 7.9 percent growth in April-June of the current fiscal.

Paswan said a short-term approach on the pricing of raw materials and steel was not good for the industry’s growth.

“There are indications that steel prices can fall, but rise in raw materials like coking coal are a cause for concern,” said Paswan.

The issue of prices as also measures to ease the input cost pressure are likely to come up during Paswan’s meeting with the industry heads.

Steel secretary P.K. Rastogi had told reporters here Aug 22 that there was no scope for an upward revision in the prices of steel products, and had rather called for a reduction following softening of global prices.

“Since global price of steel is softening, we do not see any immediate reason to go for any upward revision. Instead, the companies should think in terms of further reduction in the prices of steel,” he had said.

Rastogi also favoured a long-term arrangement between steel companies and miners on the price band of iron ore, fixed by the public sector undertaking (PSU) mining firm National Mineral Development Corp (NMDC).

The steel manufacturers at a meeting with Prime Minister Manmohan Singh here 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 a tonne.

They also agreed not to revise prices for the next three months.

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