New Delhi: Even with the three-month moratorium on steel prices ending on Thursday, August 7, the government has asked steel manufacturers to hold prices back. In an official confirmation of the fact, PK Rastogi, the newly appointed secretary to the Steel Ministry said that the government has spoken to the manufacturers to not raise prices and they have agreed. “Manufacturers have told us that they will not raise prices. We don’t want to go back to price control and recognize that market forces need to rule eventually,” he said. He added that there was no discussions of a time limit yet.
In turn, steel manufacturers said they will honour the pledge not to raise prices. Sajjan Jindal, vice chairman and managing director JSW steel said at the sidelines of a summit in the capital that his company would not be raising margins despite his margins being hit. “We don’t know when can we raise prices. We will have to wait and watch,” he said. Similarly, CMD of government owned PSU Rashtriya Ispat Nigam Limited or RINL said, “We are honouring the government’s appeal. We review prices on a day-to-day basis.”
The Ministry had earlier asked the biggest steel industry player SAIL to not raise prices. Tata Steel, the largest private player too said that it was not in a hurry to raise prices earlier this month.
Also, in a bid to ensure that steel producers do not raise prices beyond a point, the steel ministry has said it would ensure availability of adequate inputs for them. “The Ministry would shortly be facilitating a dialogue process between iron ore and steel manufacturers to formally assure them availability of inputs like iron ore at affordable prices to help them maintain the present price levels,” said Rastogi. He added that he had already had a meeting with the secretary of Mines for the same.
Jindal added that the industry may get some headroom as the price of steel has been softening over the past few days. However, he said that his company’s expansion programme may be affected as a result of margins being hit. He said that his margins had dropped by 10-12% on account of higher input costs.
The matter of steel prices remains undecided as of now. However, the government agrees that a solution needs to be found fast or else the industry could be headed for deep trouble.