New Delhi, March 5: Honouring the government’s concern over inflationary trends in the economy, major steel producers today agreed to cut prices of TMT bars, galvanised steel and hot rolled coils. However, the government’s request to hold the price line failed to cut ice with cement manufacturers who refused to roll back the prices of raw materials used in construction saying they were not in a position to absorb the increase in taxes.

Worried over the increasing rate of inflation, the government today held a meeting with leading steel companies and brought them around to cut prices. The meeting was attended by the CEOs of steel majors such as Steel Authority of India Ltd, Rashtriya Ispat Nigam Ltd, Tata Steel, Jindal Steel, Essar and Ispat.

Steel secretary R. S. Pandey said the hike was part of a routine price revision that steel producers undertake on the first of every month based on domestic and international price fluctuations.

“However, considering the concerns of the government on inflationary trends in the economy, steel producers have agreed to roll back the increase announced on March 1,” he said.

The prices of HR coils have been reduced to Rs 27,000 per tonne from 27,500 per tonne. The increase in prices of TMT bars and galvanised steel would be rolled back entirely to their pre-March level.

Pandey said the profitability of steel companies would not be affected by the reduction. He also ruled out the appointment of a regulator to check steel prices in the domestic market. As and when concern is expressed on any issue, the matter is taken up with relevant authorities, he added.

A similar meeting with cement manufacturers, however, failed to produce any result. The cement industry informed industry secretary Ajay Dua that it was not in a position to absorb the additional excise and other levies.

Cement prices were raised after finance minister P. Chidambaram proposed to impose dual excise duty on the product in this year’s budget.

Earlier in the day, Chidambaram had said while the government was not resorting to price control, it has to take effective steps to moderate the prices.

Chidambaram, in his budget speech on February 28, proposed to reduce excise duty on cement by Rs 50 from Rs 400 per tonne if it is sold at Rs 190 per 50 kg of bag, but raise it by Rs 200 per tonne to Rs 600 per tonne if sold at higher prices. The industry promptly passed on the entire increase to the customers the following day by raising retail price by Rs 12 per bag.

In the meeting with the cement industry, Dua broached the possibility of manufacturers cutting prices, but received no positive response.

price PUZZLE

Steel prices are reviewed every month; March 1 hike was a routine affair

Govt worry prompts steel units to cut prices of HR coils to Rs 27,000 per tonne

Price hike in TMT bars and galvanised steel will be rolled back entirely

Cement industry not in a position to absorb additional excise and other levies