Govt begins reviewing steel prices, exports

The steel ministry has started reviewing domestic and global steel prices and export volumes in view of the rising prices of hot-rolled coils in the country.

"I am looking into the price movements over the last six months in the global and domestic markets. Export volumes are also being studied," Steel Minister Ram Vilas Paswan told Business Standard.

Depending on the exports situation, the government will take a call on the restoration of the export benefits under the duty entitlement passbook (DEPB) scheme.

The DEPB scheme has been frozen since March 27, 2004 to increase the domestic availability of steel and contain the ballooning of the prices.

According to the official data, the domestic price of hot-rolled coils has increased to Rs 29,875 per tonne in May 2004 from Rs 20,500 per tonne in January 2003. The price of hot-rolled coils was Rs 15,500 per tonne in January 2002.

Similarly, the price of cold-rolled coils surged to Rs 34,300 per tonne in May 2004 from Rs 26,000 per tonne in January 2003. The price of cold-rolled coils was only Rs 19,500 per tonne in January 2002.

The step to review the prices is vital considering that the five major hot-rolled coils producers, Steel Authority of India Ltd, Tata Iron and Steel Company, Jindal Vijaynagar Steel Ltd, Essar Steel and Ispat Industries, have agreed to hold prices till the end of this month.

After this, the prices may be increased or maintained at the same level depending on the supply and demand for steel and input costs.

According to official sources, hot-rolled coil producers are unlikely to increase prices as the current market situation is stable and issues of rising input costs and shortage of coal have been suitably addressed.

According to Paswan, the main issues for the steel industry are production, pricing and distribution. As per the proposed National Steel Policy, domestic steel production is slated to increase to 100 million tonnes by 2011-12 from 36 million tonnes at present.

The minister said he would talk to the coal minister on the issue of shortage of stock.

Also, a senior official will be entrusted with the task of discovering new coal mines in the country and abroad and, if possible, buy mines in foreign countries to ensure the continuous supply of the raw material to state-owned Steel Authority of India Ltd.

Paswan said he asked for the withdrawal of the two profit-making companies, Manganese Ore India Ltd and Sponge Iron India Ltd from the disinvestment list.

The ministry will also pursue the case of Kudremukh Iron Ore Company Ltd, which has been allowed to continue mining only till December 2005 by the Supreme Court on a petition by environmentalists.

Depending on the exports situation, the government will take a call on the restoration of the export benefits under the duty entitlement passbook (DEPB) scheme. The scheme has been frozen since March 27, 2004 to increase the domestic availability of steel and contain the ballooning of the prices.

According to official data, the domestic price of hot-rolled coils has increased to Rs 29,875 per tonne in May 2004 from Rs 20,500 per tonne in January 2003. Similarly, the price of cold-rolled coils surged to Rs 34,300 per tonne in May 2004 from Rs 26,000 per tonne in January 2003.

The step to review the prices is vital considering that the five major hot-rolled coils producers have agreed to hold prices till the end of this month.

According to sources, the producers are unlikely to increase prices as the current market situation is stable.

According to Paswan, the main issues for the steel industry are production, pricing and distribution. The minister also said he would talk to the coal minister on the issue of shortage of stock.

Also, a senior official will be entrusted with the task of discovering new coal mines in the country and abroad and, if possible, buy mines in foreign countries to ensure the continuous supply of the raw material to state-owned Steel Authority of India Ltd.

Paswan said he asked for the withdrawal of the two profit-making companies, Manganese Ore India Ltd and Sponge Iron India Ltd from the disinvestment list.

The ministry will also pursue the case of Kudremukh Iron Ore Company Ltd, which has been allowed to continue mining only till December 2005 by the Supreme Court on a petition by environmentalists.