B Muthuraman, managing director, Tata Steel said in a press statement, "We have promised to keep steel at the reduced price for three months, we will keep that promise."
Tata Steel's promise comes at a time when there is huge disappointment as the export duty got notified even after the primary steel producers reduced prices.
Some of the steel producers, were awaiting a final decision on the export duty, after which it would take a call on the pricing strategy. A reversal of the rollback in prices was also not ruled out.
This is not the first time that Tata Steel has come out to support the government on steel prices. Last month when some of the steel producers imposed a raw material surcharge, Tata Steel and SAIL refrained from doing so. In 2004, Ratan Tata voluntarily reduced prices by Rs 2,000 a ton to keep inflation in check.
However, industry sources pointed out that Tata Steel and SAIL were immuned to a large extent from raw material price surge as they had captive mines.
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Tata Steel's Indian operations meet all its iron ore requirements and 70 per cent of coking coal through captive sources while SAIL is covered 35 per cent for coking coal and 100 per cent for iron ore.
According to the notification, export duty on hot rolled was 15 per cent, cold rolled 10 per cent, galvanised five per cent.
R S Pandey, steel secretary said that the notification was under process and was part of the finance bill, which got the President's nod and hence had to happen. However, it was being reviewed.
The ministry was in the process of collecting information from the steel producers on exports after which it would be reviewed.
Primary steel producers met the Prime Minister on May 7 and then committed to reduce prices of steel products and hold them for the next three months. Spot prices of flat products were reduced by
Rs 4,000 per tonne and in addition prices of rebars and structurals were reduced by Rs 2,000 per tonne.
At the meeting, the producers also laid out a charter of demands, which included the matter of export duty. The industry urged the government not to notify the export duty. Even though the rollback was not conditional, the government had assured that it would not notify the export duty.
Pandey said that he would be meeting secondary producers tomorrow to discuss the same issues. As of now, only seven primary steel producers had reduced prices. Secondary producers account for around 50 per cent of the country's production and 70 per cent of long products.
The government-industry spat over prices had been going since the January when the steel producers raised prices from January-April in the wake of surge in raw material and freight costs.
The industry has been facing a cost increase of Rs 8,000-14,000 per tonne over the past one year on account of a steep surge in raw material and freight costs.
However, at the behest of the government, the industry had rolled back prices three times since January.