Steel industry suggests three measures to fight inflation

The steel industry has proposed a slew of measures that will bring down prices by 12-15 per cent with immediate effect.

Sajjan Jindal, vice chairman and managing director, JSW Steel said the industry has suggested three measures that the government could take for bringing about a price reduction.

An excise duty cut from 14 per cent to six per cent could bring down the steel prices by eight per cent, a 25 per cent export duty on iron ore would impact the prices by five per cent and the withdrawal of import duty on input materials such as coke, limestone, ferro alloys, aluminium and copper would drag the prices by two per cent.

Jindal said the industry had decided to hold the priceline for now and would take a call once the government decides on the required measures.

An industry source said, "We have informed the government that we will not increase the prices now. But a hike in the prices of raw material prices, especially by NMDC, will compel us to hike the prices."

The government-owned NMDC has already written to some long-term customers hinting that prices will be hiked in April and the change will be implemented with retrospective effect.

NMDC has long-term contracts with most of the major steel producers without captive mines.

However, a Federation of Indian Mineral Industries (FIMI) delegation met the commerce secretary today and gave an assurance that exports would not be at the cost of the domestic industry.

They further agreed to interact with others in the value chain, including sponge iron, pig iron and steel industries, in a week's time to find ways of reducing the prices.

Steel industry sources said the raw material costs have increased by Rs 12,000 a tonne in the past year.

Steel prices, which have been on an uptrend since the start of the calendar year. have risen by an average Rs 6,000 a tonne since January this year.