Steel firms adamant on price, meet today
Business Standard

Steel producers appear determined not to roll back prices ahead of tomorrow’s meeting with representatives of the steel ministry.

Steel industry sources said there would be no rollback in the prices unless the ministry asked iron ore miners such as NMDC and Kudremukh Iron Ore Company (KIOCL) to roll back their price hikes.

The producers are readying presentations for tomorrow’s meeting, attributing the price hike to the increase in raw material prices.

Some producers would make the point that the steel prices could only stabilize if the ministry asked NMDC to supply iron ore to steel companies without captive mines at cost plus formula and KIOCL to supply pellets in the same formula.

NMDC iron ore lump price increased by Rs 1,527 and fines by Rs 1,222 in April 2007-February 2008, while KIOCL pellet price rose by Rs 3,900.

The producers are also likely to demand immediate allocation of captive iron ore blocks to integrated steel producers, reduction of railway freight and removal of congestion charges by railways for the transportation of iron ore to ports.

Following the price hike at beginning of the month, the steel minister said that he would seek justification from the producers.

A rollback if it happens would be the second in this financial year. Last March, at the behest of the government, the industry went for a partial rollback to rein in inflation.

Steel sources pointed out that the results of most of the steel companies without captive mines go to show the adverse impact of spiralling raw material prices on the bottomlines.

“The price increase in January and February was only to recover Rs 3,000 a tonne cost of the total cost increase of Rs 5,500 a tonne,” they said.

Apart from iron ore, coking coal prices have increased by $60 a tonne in the last three months.