Commodity prices go up and they go down. Now, if only somebody could tell this to the government.
Flashback. Steel prices were at record highs earlier this year because of the global economic boom and manic pre-Olympics building in China. That was when the steel ministry hit out against what it believed was profiteering by the steel companies, said to be feeding the inflationary fire. There were threats of controls unless prices were “voluntarily” brought down by these evil firms.
Fast forward. The bubble has burst. Global steel prices have tumbled and many firms such as ArcelorMittal have announced production cuts. Indian steel companies too are under pressure. The very same firms that were demonized in April are now being treated like innocent babes in the woods. There is talk of fiscal sops, funded by taxpayers.
Steel companies deserve neither extreme. Surely they know business cycles are inevitable. The ministry should know that meddling is no substitute for coherent long-term policy.