SAIL limits retail steel margins to Rs1,200 per tonne, bars resale by MoU customers

Mumbai: Steel Authority of India Ltd (SAIL) has asked its distributors to limit retail margins at Rs1,200 a tonne, to keep prices steady and help the government tame inflation.

The state-run PSU also warned its MoU customer companies against selling coils procured from it.

''SAIL has informed its MoU HR coil customers in writing that their purchases from the company are only meant for actual consumption and that any resale of the product will attract punitive action," a statement from SAIL said.

To ensure that steel reaches actual consumers at correct prices, SAIL had  already introduced a special scheme in Kolkata and Faridabad for supply of HSM plates and CR coils/sheets to consumers who require up to 10 tonnes of the product.

SAIL has now alerted its branch sales offices to keep a strict vigil on dealers selling the products above the maximum recommended retail price (MRRP) limits and has instructed them to stop supplies to those who do not adhere to the company's direction, the statement added.

SAIL as well as private sector steel producers have been selling primary steel products at a discount, following pressure from government.

Steel prices, however, continued to rise despite the cuts offered by producers as traders and other intermediaries continued to passed on higher costs to customers.

''Any departure from this limit will invite stern action. These customers have also been advised to inform SAIL about their stockholding of SAIL products on a weekly basis," SAIL said in the statement.

While private steel producers are keen to raise prices after the price-freeze period ends, the government said it would look for measures to stem rising prices.