Steel producers agree to lower prices after meeting PM

New Delhi, May 7 : Steel producers on Wednesday agreed to lower prices after meeting Prime Minister Manmohan Singh in New Delhi.

High prices of metals, food and fuel hoisted India's inflation rate to 7.4 per cent in late March, its highest level since November 2004, triggering protests and government curbs on rice exports to boost domestic supplies.

Following a sharp rise in prices of metal the government had recently decided to impose export duty on steel.

Last month the Prime Minister also urged the steel makers to not to take advantage of global surge in steel prices.

"The Ministry was assured that they are trying to raise their productivity to absorb the part of the cost but the entire cost increase is so heavy that they had to be passed on to the government. Now considering the concerns of the government, steel industry has proposed that as special measure they will reduce the prices by Rs 4000 in respect of flat products," said state-run Steel Authority of India Limited (SAIL) chairman Sushil Kumar Roongta.

"It will be done by those producers who had raised the prices in the month of April. And these prices will be kept firm for next three months," he added.

Prices of flat products have been reduced by Rs. 4000 per tonne by producers who effected price increase in April '08. In addition, prices of rebars and structurals where no increase was affected in April-May'08 have also been reduced by Rs 2000 per tonne.

The steel producers promised to hold prices for the next three months.

In view of the roll back in prices and self-restraint by producers on steel exports, they urged the government not to impose duty on export of steel products.

They also said that in order to facilitate investment in steel sector and to augment capacities in the country, which is the long-term solution, the allocation and renewal of iron ore and coal mines, should be ensured on priority.

Besides Roongta, Tata Steel Managing Director B Muthuraman, JSW Steel Vice Chairman and Managing Director Sajjan Jindal, Ispat Industries Managing Director Vinod Kumar Mittal and Essar Steel chief Shashi Ruia also participated in the meeting.

Steel firms such as state-run SAIL, JSW Steel, Ispat Industries have urged the government to reduce duties on inputs and excise on steel.

ANI