Paswan threatens price regulation for steel

Steel lobby defers price hike.

Private sector steel companies withdrew plans for an immediate price hike in steel products after Union steel minister Ram Vilas Paswan threatened them with a regulatory body to keep prices under control. Paswan's proposal follows the announcement of a Rs 500 per tonne price hike by Tata Steel yesterday.

In a quick reaction, private sector steel makers decided late this evening to defer price hikes.

Addressing the National Steel Consumers' Council meeting in Mumbai today, Paswan said the government was unhappy with the rising steel prices. "The producers pass the increase in prices to consumers saying they have no control over the rise in input prices. This is not desirable," he said.

Paswan said the proposed regulator would monitor the movement of steel prices and identify demand-supply bottlenecks.

At the meeting, representatives of the private steel makers vociferously protested against the idea of a regulator. Vinod Garg, a representative of the Indian Steel Alliance, a forum of steel manufacturers, said the steel makers would have welcomed the proposal of setting up a regulator provided the government promised to maintain uninterrupted supply of raw material at pre-determined prices. Garg explained the companies were not against the government move if their margins were protected.

Tata Steel announced a Rs 500 per tonne price hike for retail consumers effective December 1, and others with the exception of Steel Authority of India Ltd (SAIL), are expected to follow suit. The industry attributes the rise in prices to the increase in rail freight, coupled with higher prices of coal and gas.

SAIL Chairman VS Jain said the company had decided not to increase prices.