Date:03/03/2004 URL: http://www.thehindubusinessline.com/2004/03/03/stories/2004030301720500.htm

Back Prices of HR steel hiked

Our Bureau

New Delhi , March 2

IN a move that may embarrass the Government, domestic steel manufacturers are understood to have implemented a hike in the prices of hot rolled (HR) steel by around Rs 3,000-Rs 4,000 per tonne on Tuesday. This is despite the written undertaking that the Indian Steel Alliance (ISA) had submitted to the Minister for Steel, Mr B.K. Tripathy, last week, noting that prices would be kept under check.

Essentially, the ISA had assured the Minister that HR steel would be kept within the Rs 27,000-per tonne price band till June and that the small sector would be supplied at a concession of Rs 1,500-Rs 2,000 per tonne.

Interestingly, at that point of time, while only one private sector manufacturer was selling HR steel at Rs 27,000 per tonne — having hiked its prices by Rs 4,000 on February 16 — the other producers were still supplying at prices ranging from Rs 22,000 to Rs 24,000.

Market sources say the steel producers appear to have taken advantage of the "ambiguity" in the written undertaking that the current hike to Rs 27,000 per tonne does not violate the commitment.

In particular, the steel producers are peeved at the withdrawal of export concessions. According to the Executive Director of Corsma (Cold Rolled Steel Manufacturers' Association), Mr S.C. Mathur, the HR coil producers have gone back on their assurance that the prices shall be frozen till June, which was also mentioned by the Minister. "But the prices have been increased from Rs 23,000 in February to Rs 27,000 per tonne in March (ex-plant, excluding excise and other taxes)," he said.

Market sources said all the producers who have effected the price hike have done so through verbal communication to their stockyards. SAIL, however, is not clear as to whether it too, will be able to effect a similar price increase, especially at a time when elections are nearing, company officials said. "But if we are unable to do so, our officials will come under immense pressure as there will be a substantial premium on our products. There will be pressure from various quarters on our officials to sell steel to favoured persons and being a Government-controlled company, we have apprehensions, more so because it is election time," the SAIL official said.