New Delhi: The steel industry assured the Government on 5 April that it will hold the price line for this month, despite rise in input costs and pressure on their margins, to help it fight inflation.
The industry also asked Finance Minister P Chidambaram not to roll back export duty of Rs300 a metric tonne on iron ore, announced in the Budget 2007-08, since the input is crucial to the domestic steel industry.
“We will not increase the prices for the month of April, but will review the situation next month,” Assocham senior vice president Sajjan Jindal, who led the steel industry delegation, told reporters after the meeting with Chidambaram and other ministry officials.
He said input prices of steel like railway freight and finances have gone up of late and the industry’s decision to hold the price line would strain its profitability, the industry decided to hold the price line to help the Government tame the rising inflation.
“It is not the Finance Minister alone who should be worried about inflation. Steel is the big item in the wholesale prices-based inflation. We have to support the Government fight inflation,” Jindal who is also vice chairman and managing director of JSW Steel Ltd, said.
After remaining unchanged for three weeks in a row at 6.46%, inflation declined to 6.39% for the week ended 24 March, still at much higher level than RBI’s projection of 5-5.5% for this fiscal.
The delegation comprises representatives of SAIL, Tata Steel, Jindal Steel and Power and others.
The assurance by steel industry came two days after indications of rise in prices of the product due to a supply-demand mismatch that has developed in select steel products during the past few weeks.
Steel makers had raised the prices immediately after the budget, but rolled them back after the government asked them to do so.
The industry players also asked the Finance Minister not to take back the export duty of Rs300 per metric tonne, saying out of 100 MT iron exports from India, 80-85 MT were exported to China.
“China has plans to raise its steel production from 400 MT to 800 MT, while importing iron ore from India and other countries, government should not reduce export duty under any pressure otherwise India may become a steel importer in near future,” said Jindal.
The delegation earlier in the day also met Home Minister Shivraj Patil, who heads a Group of Ministers on mining.
At the meeting with Patil and Chidambaram, the steel industry gave committment to raise domestic steel production to 80-85 MT from the present level of 40 MT.
SAIL assured to raise its capacity from 14.5 MT to 20 MT, JSW from 3.8 MT to 6.2 MT, Jindal Steel and Power from 3 MT to 9 MT, Tata Steel from 5 MT to 12 MT and Essar from 4.6 MT to 9 MT.
Besides, sponge iron industry assured to raising its capacity by 10 MT to 22 MT, the delegatation said in its presentation.
The industry also sought a simplified mining policy that could facilitate raising steel capacity to 200 MT by 2020 with an estimated investment of Rs3,00,000 crore.