Steel manufacturers may not raise prices

The five major hot-rolled coil producers are unlikely to increase prices this month, according to officials at these companies.

An executive with Steel Authority of India Ltd, the country's largest steel producer, said the company would not hike the prices from the current Rs 25,000 per tonne as the "market situation was stable".

The four other hot-rolled coil producers -- Tata Iron and Steel Company Ltd, Essar Steel, Ispat Industries and Jindal Vijaynagar Steel Ltd -- are also unlikely to increase prices as global prices have stabilised.

However, some of the steel makers said they were still plagued by the problem of coal shortage, which could prop up the prices.

After increasing the prices to Rs 27,000 per tonne in February, the five steel makers had reduced it by Rs 2,000 per tonne in early March, following talks with the previous government.

They had also assured that the prices would be held steady till June-end at Rs 25,000 per tonne. The increase in prices had led downstream users, including cold rollers, automobile, two-wheeler, bicycle and pipe manufacturers, to hike the prices of finished goods.

The steel makers had blamed rising international prices, higher input costs and shortage of coal and metcoke for the price hikes.

An official at Ispat Industries said the price of Rs 25,000 per tonne would be maintained in June.

He said the company would be able to manage the rise in input costs through higher volumes. Ispat, which had produced 1.61 million tonnes during 2003-04, plans to produce about 2.5 million tonnes in this financial year.

A spokesperson of Tisco said the current market situation was more stable but declined to comment on any price revision.

The spiralling of prices had led the government to enforce a freeze on export benefits under the Duty Entitlement Passbook (DEPB) scheme from March 27, 2004.

The government had also reduced the customs duty from 25 per cent to 15 per cent and halved the excise duty to 8 per cent to control the prices.

Of late, global steel prices have eased a bit because of a fall in consumption in China, the world's biggest consumer.

Prices for flat-rolled products have dipped by $50-60, while that of scrap products have fallen by $30 per tonne. Prices of raw materials like metcoke have also witnessed a fall, while freight costs have come down.

Moosa Raza, president, Indian Steel Alliance -- an association of the five steel majors -- said steel prices in the international market were steadfast because of a slow down in consumption by China. He also said the shortage of coal and metcoke remained a major problem for domestic companies.