Rastogi: Firm stand

New Delhi, Sept. 12: The government is opposed to fixing a price band in steel and expects steel producers to cut prices on their own in line with the softening of global prices.

According to steel secretary P.K Rastogi, “There is a case for further downward revision of steel prices, but we are not in favour of any price mechanism to fix steel rates. The government would like to play a facilitators’ role.” He was speaking on the sidelines of a summit on steel organised by the Confederation of Indian Industry.

When prices rose earlier this year, Rastogi said, the government adopted fiscal measures to increase supply.

He said iron ore miners has agreed to a long-term supply contract with steel firms.

“The iron ore producers have agreed to a long-term agreement. The government has held talks between the miners and steel producers and will be meeting again. The talks are still on,” said Rastogi. A long-term deal will ensure the availability of ore at reasonable prices to steel firms.

Rastogi said that demand for steel in this fiscal was more than the supply, which will necessitate import. India imports about seven million tonnes of steel annually, while its exports stand at over 4.5 million tonnes.

The steel ministry has also proposed a five per cent hike in the export duty of iron ore to 20 per cent from 15 per cent.

Last month, industry chamber Assocham, on behalf of domestic steel firms, had demanded a duty hike to 35 per cent on ore to increase supply and lower prices.

Many steel producers have recently cut the prices of their products by up to Rs 2,000 per tonne on softening global trend.

They have not increased the prices of their products since May 7, helping the government to check inflation which has touched 12.1 per cent for the week ended August 30.

However, rising prices of raw materials such as iron ore and coke have squeezed the margins of steel firms.

Steel minister Ram Vilas Paswan had said that the prices of essential raw materials should be maintained at reasonable levels.

He said the prices of critical inputs such as coking coal have increased more sharply than the prices of steel.