Punjab steel units say rollback insufficient

The government's effort in controlling steel prices has failed to address the problems of steel consumers.

Local industrialists said the Prime Minister's move to get the steel industry to roll back hikes in rates of hot-rolled or cold-rolled steel could not tackle the problem of rising steel prices as a whole.

"Even after Steel Authority of India (SAIL) rolled back the increase in steel prices by 50 per cent, Rs 500 per tonne, there was no rollback in the case of cold-rolled steel. This was apart from the fact that private manufacturers of steel effected only a nominal rollback in the case of hot-rolled (HR) coil prices," said the president of the Apex Chamber of Commerce and Industry, P D Sharma.

For steel consumers like cycle and engineering units, rates of cold-rolled coil have a significant bearing on cost. "Big industrialists, after obtaining HR coils, convert them into CR coils. As rates of CR coils have not been reduced as desired, steel consumers have to suffer on account of high prices."

Various measures, including changes in the method of setting prices and reduction in Customs on imported steel scrap, were needed to tackle the problems, said industry representatives.

On March 2, the price of HR coil had been raised by Rs 1,000 a tonne. Earlier, the price was raised by Rs 500 per tonne in February. The price of HR coil has touched Rs 32,300 per tonne, a rise of 30 per cent in a year.

Similarly, the prices of rounds had also shot up and reached Rs 27,500 a tonne from Rs 24,500 a tonne in five months.

Condemning the existing method of determining rates based on import parity, they said this method needed to be done away with.

Industrialists also said steel rounds, which are used widely by tiny, small and medium-sized units, were also highly priced.

"Rounds are produced by small secondary producers, mainly by induction furnaces. Rashtriya Ispat Nigam Ltd also produces rounds, which are pitched very high, and should be rolled back," said Sharma.

Sharma said there should be a reduction in Customs duty on imported steel scrap from the existing 5 per cent to nil.