Welcome to myjunction ~ the junction for junctionites!

Friday, July 4, 2008


Primary steel producers have assured the Government that they will take a series of steps to check the prices of steel at the retail level. The pipes and tubes manufacturers have also assured the government that they will also bring down the prices of pipes and tubes by about 10 per cent with immediate effect to around Rs. 48,000. These assurances were given at a meeting of primary steel producers and pipes and tubes manufactures convened by the Ministry of Steel held yesterday.

Secretary, Ministry of Steel, Shri R.S. Pandey in his remarks impressed upon the producers that despite an assurance given by them at a meeting with the Prime Minister to hold the priceline for three months, prices have gone up at the retail level. He strongly emphasised upon the need to hold the price of steel items at a time when the government is fighting inflationary pressure. He said the government is responsive to the needs of the industry and waived the export duty on steel and imposed a 15 per cent advaloram duty on the export of iron ore.

The Steel Secretary took a serious view of the rise in the prices of pipes and tubes since they receive 80 per cent of their raw material requirement from the Steel Authority of India (SAIL) at a fixed price of Rs. 42,000 per tonne and with an explicit understanding that they will market their product at a price10 per cent higher than the procurement price.

Talking to the newsmen after the conclusion of the meeting Shri I.P. Jain from the Federation of Industries of India representing the tubes and pipes manufactures said that they will bring down the price to a ceiling price of Rs. 48,000 per tonne. He said their members will be advised to reduce the price by 10% and the revised price will come into force with immediate effect.

Shri Sajjan Jindal of JSW and Shri S.K. Roongta of SAIL said that the primary steel producers are deeply distressed by reports of higher prices being charged. He said only 5 per cent of the HR products are marketed through retailers. While they have been supplying the products at April price level, price distortion have taken place at the retail points. They said the producers will review the trading arrangement and may opt for MRP type arrangement. They also said that individual producers may put up advertisements announcing the price and also facility for small consumers to place their orders through the Internet.

Shri Jindal was emphatic that the primary steel producers are with the government on the issue of containing steel prices at the difficult time and wanted to dispel the impression that steel prices will be hiked in August after the expiry of three months moratorium. He described reports that prices will be hiked in August as ‘undue speculation’.

Shri Jindal said that they will take steps to contain direct and indirect exports through secondary producers so that availability increases in the domestic market. It was noted that steel exports during April – June’08 has declined to 0.9 million tonnes as against 1.3 million tonnes during the same period last year.

Source: Ministry of Steel, Government of India

No comments: