Explain price hike, Paswan to steel firms
Business Standard

The government today asked the steel industry to justify the frequent price hikes and said that failure to do so could attract a price regulatory mechanism. The warning comes a day after major domestic steel makers raised prices of their products,

Steel Minister Ram Vilas Paswan said today.the usual alibi given by steel makers for raising the prices was an increase in rates globally.

"We will meet the steel companies within a week to seek a justification for frequent price hikes. If it's not justified, we will ask them to cut prices,”

“The per capita steel consumption of 45 kgs in the country is much lower compared to that in most developed nations. Prices should be reasonable to increase our consumption”, the minister said.

The cement industry had also drawn the same reactions from the government when they increased prices after last year’s Budget. The government had then termed the hikes unwarranted.

Paswan, however, gave the steel industry something to cheer about by saying that the ministry has proposed reduction in import duties of some critical inputs consumed by the steel producers.

The ministry has proposed reduction in customs duty of iron ore from the current level of two per cent for the next budget. It has also proposed complete abolition of custom duties on coking coal and scrap.

Currently, coking coal attracts a duty of five per cent while scrap has a duty of three per cent. Exuding confidence that the steel sector was moving forward, Paswan pointed out that if the capacity-expansions announced by the steel major fructify in time, India was likely to have a steel production of around 124 million tonnes (mt) by 2012 and 275 mt by 2019-20.

He said steel demand was likely to grow 10 per cent in the next few years. The Planning Commission's Working Group on steel has projected a demand of 70.34 mt for finished steel and 80.23 mt for crude steel by the end of the 11th Plan.

According to a steel ministry note, the country is likely to rope in investment to the tune of Rs 2,76,880 crore by 2012 and Rs 8,70,640 crore by 2020 in the sector.

On the contentious issue of iron ore export, Paswan said ore export should only be allowed after meeting the domestic requirement.

Paswan urges steel makers to cut prices
Economic Times

A day after major domestic steel makers raised prices of their products, the government has asked the steel industry to rein in prices saying that failure in doing so could attract a price regulatory mechanism.

“We have taken the rise in steel prices seriously. We want to increase the per capita consumption of steel and as such rise in prices will have to be reasonable,” Steel minister Ram Vilas Paswan said here on Saturday.

He pointed out that the usual alibi given by steel makers for raising the prices is that the rates have shot up globally. “We will meet the steelmakers within a week to ascertain the reasons behind this price rise,” he pointed out.

Domestic steel majors like Tata Steel and SAIL on Friday increased prices of their various products by Rs 1,500-2,500 per ton citing rise in input costs and increase in global steel prices.

“If we realise that despite our deliberations, they continue to increase prices, we will have no options except to tell the government to install a mechanism to contain steel prices,” Mr Paswan said. “It is better that steel companies do their bit to control prices or else the government’s ultimate weapon is a regulator,” he added.

Since its de-regulation in 1991, the steel sector in the country is free to decide on its domestic and export prices. In January, most steel companies hiked their prices including state-run steel giant SAIL increasing its prices by Rs 1,000 per tonne. Tata Steel hiked the prices by Rs 800-900 per tonne and others followed.

To offset rising input costs, Mr Paswan said he has proposed to the finance ministry that import duties on met coke and scrap iron ore should be cut to zero from the present 5 %. The ministry also wants imposition of an ad-valorem duty or royalties on iron ore exports charged according to their values to curtail exports. Steel firms now pay Rs 50 a tonne for export of ores with less than 62 % of iron content.

India, which is scaling up its infrastructure at a cost of $500 billion in five years, plans to double steel capacity to 100 million tonnes by 2012 to meet domestic demand. The minister said the government will invest Rs 500 billion in the next few years to increase the capacity of state-run Steel Authority of India to meet the growing domestic demand.

Mr Paswan, also the minister for chemicals and fertilisers, said the much-awaited pharma policy would be cleared by the Group of Ministers in its next meeting. “I am sure that GoM would clear the pharma policy in its next meeting, the date for which is not yet decided but it will be held soon,” he said. The GoM, headed by Agriculture Minister Sharad Pawar, held three meetings so far, but it has not been able to come with an amicable solution on price controls.

Government tells steel industry to rein in prices
Financial Express

A day after major domestic steel makers raised prices of their products, government has warned the steel industry to rein in prices saying that failure in doing so could attract a price regulatory mechanism.
“We have taken it (rise in steel prices) seriously. We want to increase the per capita consumption of steel and as such rise in prices will have to be reasonable,” steel minister Ram Vilas Paswan said here on Saturday.

He pointed out that the usual alibi given by steel makers for raising the prices is that the rates have shot up globally. “We will meet the steelmakers within a week to ascertain the reasons behind this price rise,” he pointed out.
Domestic steel majors like Tata Steel and SAIL on Friday increased prices of their various products by Rs 1,500-2,500 per tonne citing rise in input costs and increase in global steel prices.

“If we realise that despite our deliberations, they continue to increase prices, we will have no options except to tell the government to install a mechanism to contain steel prices,” Paswan said.
“It is better that the steel Companies do their bit to control prices or else the government’s ultimate weapon is a regulator,” he added.