Steel prices set to rise

Steel prices set to rise

New Delhi: It seems that the price of steel is set to increase even more with the Government taking a stance of non-interference. At a steel industry conference in New Delhi, the Union Minister for Steel, Ram Vilas Paswan said that when the deadline for holding prices for steel manufacturers expires next month in August, the government will not interfere in steel manufacturer’s price revision process and will let them take the call. 02cb2ef6-533f-11dd-9b1b-000b5dabf636.flvPaswan on steel prices

The steel manufacturers and the minister had met the Prime Minister on May 7 this year with a view to discuss steel price and its effect on inflation. Then, the manufacturers had increased prices by Rs5,000 per tonne. After the meeting, steel manufacturers agreed to cut prices by Rs4,000 per tonne and also said that they will not increase prices for the next three months.

However, price of steel in the retail market continued to rise and has increased by over 30% in the past three months. At present, the price of steel in the market stands at around Rs36,000 per tonne.

The Minister blamed the same on hoarders and distributors. “The industry has kept its promise but the middlemen are to blame. They are not passing the price rise to retail consumers. Both the government and the steel manufacturers need to take action against the same," he said.

Paswan justified the rise on account of rise in the basic raw material for production of steel like coking coal and iron ore. Coking coal has risen from $98 in 2007 to $300 now while iron ore has risen by over 65% since December 2007. Transportation costs too have increased by 10-15% on account of oil price rise in past few months.

B Muthuraman, Tata Steel managing director said that steel companies could simply not afford to work at their current margins. He refused to give the increase in steel prices planned by the company but said that “present prices were unsustainable".

Industry experts presented at the summit were not sure of the exact quantum of the price rise. Others steel industry participants present at the summit held that the manufacturers may roll back the Rs4, 000 cut taking the price of steel to around Rs40,000 tonne. On the whole, they were unanimous that there will surely be an increase in the price of steel going forward.