In a joint representation to Prime Minister Manmohan Singh, firms including SAIL, Essar, Tata Steel, Ispat, RINL, JSW and JSPL said that of 55 million tonnes steel produced in the country, 20 million tonnes come from the secondary sector.
"It is difficult to implement price discipline for this sector as there is a large number of small players involved. This may result in a situation whereby primary steel producers' prices may be lower than those of secondary producers'," they pointed out.
"This will only deprive main producers of considerable revenue which could have been ploughed back for further investment," the firms told PM. The major steel utilities have already announced reduction in prices of flat products by Rs 4,000 per tonne and rebars and structural steel by Rs 2,000 a tonne.
They said some products (like HR coils) sold by primary steelmakers do not go directly to the consumers but are further processed by the secondary sector. "Unless appropriate mechanism is evolved, benefit of lower prices may not get passed on to the ultimate consumers," the producers said.
