New Delhi: Steel makers will honour their commitment to Prime Minister Manmohan Singh to hold prices for three months, but rates will go up thereafter, Vice-Chairman and Managing Director of JSW Steel and Assocham President Sajjan Jindal said.
“Prices have to go up. We have to go into the global price regime. What can you do if raw material prices have gone up,” Jindal told PTI.
Jindal took over as Assocham President on 3 June, replacing Venugopal Dhoot, head of the Videocon Group.
Large steel producers had reduced prices up to Rs4,000 per tonne on request of Prime Minister Manmohan Singh on 7 May. They had also agreed to hold the price line for the next three months. The three-month price moratorium expires in August.
Jindal said there is a big gap between global and Indian prices. “Currently, the international price for HR coils is close to $1,200 a tonne. In India, we are selling it at $850 per tonne,” he said.
The new Assocham President said the raw material prices, both of iron ore and scrap, are going up. “Either that part of the steel industry will close - creating shortages - or price have to go up,” Jindal noted.
Asked whether over $100 billion of investment announced by global majors like ArcelorMittal and Posco could face a risk if the government continues to restrict steel exports, Jindal said: “I guess so. One has to talk to Posco and ArcelorMittal and (ask) if there is an export duty and restrictions, whether they will invest.”