Date:14/06/2008 URL: http://www.thehindu.com/2008/06/14/stories/2008061457220100.htm

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Steel price hits the roof again

M. Gunasekaran

Photo: M. Balaji

Hard times ahead: Rising steel prices will make construction costlier in Tirupur. –

TIRUPUR: Steel prices have hit the roof again and construction industry and manufacturing sectors find themselves in a difficult situation. In the last 10 days the price rose by Rs. 7,500 a tonne. The selling price of TMT bars of some of the leading brands in the region, such as Rana, Agni, Amman and I Steel used for building construction, rose to Rs. 49,500 a tonne against Rs. 42,000 10 days ago. The rates of these items hover around Rs. 49,000 a tonne in Coimbatore. On Tuesday itself steel makers hiked the price by Rs. 2,500 a tonne, a trader said.

Industry sources say that the rates of these items touched an all time high of Rs. 52,000 during the end of March. The rates came down significantly after Prime Minister Manmohan Singh’s appeal to the steel industry not to fall prey to the temptation of seeking windfall gains from market manipulation.

Immediately after the meeting, the country’s largest steel maker Steel Authority of India Limited (SAIL) and private sector giant TATA Steel slashed prices and promised to hold the price line till August.

However, industry circles complain that these companies have reduced supplies to the market drastically while keeping the price line, which is less than Rs. 45,000. This has indirectly fuelled the price increase by secondary suppliers as the whole industry depends on them now.

Terming the hike as unjustifiable, the Builders Association of India’s Tirupur chapter president K. Subramanian says the raw material cost has not gone up suddenly except the increase in the fuel price. “The steel price was below Rs. 35,000 a tonne four months ago. The sudden hike by manufacturers should not be allowed. We had believed that the price would not go up after the Prime Minister’s intervention. Unfortunately, it did not happen,” Mr. Subramanian said.

Mr. Subramanian urged the Government to take the makers of regional brands to task as a majority of the buyers prefer them. Construction activity in the region has been affected largely because of the spurt in prices. Traders complain about sluggish sale owing to the increase in prices. The retail price of cement was also raised to Rs. 260 a bag from Rs. 250 on Wednesday.