Secondary steelmakers, including Maharashtra Seamless, Bhushan Steel and National Steel, have announced to cut prices of flat products by Rs 4,000 per tonne, even as the steel ministry plans to meet the public sector mining companies to discuss the prices.
"The secondary steel producers have assured that they will reduce prices of their flat products by Rs 4,000 per tonne and maintain the new priceline for the next three months," Steel Ministry Secretary RS Pandey told the media today after a meeting with the steelmakers.
Pandey said the ministry would also discuss the pricing issue with the National Mineral Development Corporation (NMDC) and Kudremukh Iron Ore Company Ltd (KIOCL). "We have heard one side of the story. Now we will call the mining companies and discuss it with them," he said.
The move to meet mining companies, especially NMDC and KIOCL, both of which are under the steel ministry, stems from the demands laid down by the primary steel producers.
At a meeting with the prime minister on May 7, steel producers demanded that NMDC should roll back increase of about 47 per cent in prices of iron ore, made effective from October 1, 2007, and should maintain the same priceline post-April 2008. Merchant miners should also sell iron ore at the NMDC benchmark prices to the domestic steel producers.
Steel industry sources said NMDC had earlier indicated that steel prices could be revised upwards by around 65 per cent with effect from April.
They also pointed out, as in the case of steel producers, NMDC and KIOCL should give priority to domestic steel producers for supply of iron ore and pellets before undertaking exports.
NMDC produces around 30 million tonnes of iron ore annually from its Bailadila deposit in Chhattisgarh and Donimalai in Karnataka.
It supplies to most domestic steel companies that do not have captive mines like Essar Steel and Ispat Industries. The miner also meets the entire requirements of state-owned Visakhapatnam Steel Plant.
The steel producers have also suggested that an ad valorem duty of 15-20 per cent on the export of iron ore be levied for conserving the raw materials.
The steel ministry was looking into the demands of steel producers before forming a view. A review of steel export duty was also being looked into.
The clampdown on steel prices happened after successive increases from January on the back of a surge in raw material prices. Over the past year, the impact of raw material increases on per tonne of steel was Rs 10,000-14,000 while the recovery was around Rs 6,000 per tonne after the rollback.
