Steel companies to cut prices of pipes, tubes by 10 per cent

Mumbai: The secondary producers have assured to rollback the 10 per cent hike in the prices of steel tubes and pipes effected in June, despite a stable rates of primary steel, R S Pandey, secretary at the steel ministry, said.

At a meeting called by the steel ministry yesterday, primary steel producers had assured the government that they will try to hold the price line beyond July in a bid to help the government in its battle against rising inflation.

In May, the steel producers had committed to hold prices for a three-month period, which expires in July.

The meeting was called following a rise in retail prices of steel over the last seven to 10 days amidst soaring inflation that hit a 13-year high of 11.42 per cent in mid-June.

"The industry is with the government in containing inflation. Whatever is required to control inflation, will be done by the industry. We will hold prices beyond July if required", Sajjan Jindal, vice chairman and managing director of JSW said on the sideline of the meeting.

Expressing concern at the price spike, the Steel Authority of India Ltd (SAIL), the country's largest  producer, said the company ''has received reports, including reports in the print media, regarding increase in the market prices of steel during June 2008, particularly during the last week.''

SAIL, however, had maintained its prices for the domestic market during June at the same level as that of May and will maintain the same price level for July also, the release said, adding the company had, in fact, increased supplies to the domestic market by 32 per cent in June this year compared with June last year.

SAIL's June sales of TMT bars and hot rolled coil stood at 74 per cent and 20 per cent, respectively while for the April-June quarter, SAIL's supplies of TMT bars, hot rolled coils and galvanised plain/corrugated sheet to the domestic market have gone up by 55 per cent, 16 per cent and 30 per cent, respectively, the company said in a release.

Supplies to the domestic market as a whole have gone up by approximately 9 per cent during the first quarter, the release added.

''It has been brought to (our) notice that prices of some of the steel products have again started rising in the retail market in the last 7-10 days, Ispat Industries said in a statement, adding the company has decided to restrict supply to secondary producers for exports, while increasing supplies to domestic users and initiate measures to force retailers to sell steel products at reduced prices.

''These moves could bring down hot rolled steel prices by around Rs2,000-2,500 a tonne at the retail level,'' an Ispat official said.

The steel ministry had discussed with steel produces measures to control product prices, which have risen despite pledges to boost supplies.

The government would verify whether steel firms had maintained prices in line with a guarantee given in May, and increased supplies to the local market, the officials said.

Steel produces had agreed to hold prices for three months to help the government fight rising inflation, and companies including state-run Steel Authority of India and Tata Steel had cut prices by 5-10 per cent.

However, average retail prices of hot-rolled coils have increased by about nine percent since mid-May, according to data collected by the Joint Plant Committee (JPC) of the steel ministry.

Provisional data from the JPC showed, steel consumption rose by 10.7 per cent in 2007/08, while production growth was lower at 5.1 per cent. The gap was met through 7.18 million tonnes of imports.