Special Correspondent

NEW DELHI: In a bid to help the Government fight inflation, the steel industry on Thursday agreed to reduce prices of select products by up to 10 per cent and also discourage exports to ensure greater domestic availability.

At a three-hour long meeting convened by the Steel Ministry here, while primary steel producers assured the Government of a series of steps to check prices at the retail level, secondary manufacturers promised to scale down prices of pipes and tubes by about 10 per cent to around Rs. 48,000 a tonne with immediate effect.

Domestic availability

Talking to newspersons after the meeting, primary steel producers, including state-owned SAIL and RINL as also private players such as Tata Steel, JSW Steel, JSPL and Ispat, said that the industry would discourage direct and indirect exports of hot rolled (HR) coils and galvanised products to augment their domestic availability by up to 12 per cent or about two million tonnes. Alongside, at the retail level, they would review the MRP arrangements with dealers to cool soaring steel prices.

JSW Steel Vice-Chairman and Managing Director Sajjan Jindal rejected speculation that steel producers were set to hike prices at the end of the three-month moratorium. “It is not necessary that prices will go up from August. We will have to see,” he said. Mr. Jindal’s view was also endorsed by Steel Secretary R. S. Pandey who said: “Hoarders thinking that steel prices will go up in August are in for a surprise.” Mr. Pandey hoped that the measures being taken by the industry would yield concrete results within a week.

Speculation

The Steel Secretary pointed out that speculation was the prime reason for the current spurt in steel prices. “It was because of speculation in the market that prices may go up from August that dealers started hoarding, thereby leading to the price rise,” he said. Elaborating on the review of trading arrangement and the MRP concept, Mr. Pandey said: “[The] present practice is that for certain quantities of offtake by dealers, the primary producers do not insist on MRP, which they may insist now to benefit end-consumers.”

In this regard, SAIL Chairman S. K. Roongta pointed out that steel producers could go to the extent of suspending supply and even cancelling the contracts with dealers if they overcharge customers.

Earlier, in his initial remarks at the meeting, the Steel Secretary regretted that despite the industry’s assurance to the Prime Minister on holding the price line for three months, steel prices had gone up at the retail level at a time when the Government was fighting inflationary pressure.