The Hindu Business Line : Steel prices may come down by 10-20%

New Delhi, April 1 As part of its inflation management strategy, the Government is pitching for a 10-20 per cent reduction in steel prices before the month end.

Senior officials of the Ministry of Commerce and Ministry of Steel on Tuesday met representatives of the Indian mining industry to explore ways of controlling spiralling steel prices.

Speaking to reporters after the meeting, the Commerce Secretary, Mr G.K. Pillai, said that the Government believes steel prices can easily come down by 10-20 per cent.

Another meeting with major steel producers like SAIL, Tata Steel and Essar among others, is scheduled for Thursday while secondary steel manufacturers represented by a number of associations will meet Ministry officials on Wednesday.

The miners, represented by the Federation of Indian Mining Industries (FIMI) will initiate discussions with the steel manufacturers and revert to the Government.

The FIMI President, Mr Rahul Baldota, told Business Line after the meeting, “We hope to get back to the Government within a week’s time. We will now tell our members to begin discussions with steel manufacturers at their respective regions because price and logistic parameters vary widely among regions”.

“Rising steel prices have impacted all down stream industries such as bicycle and automobiles manufacturers, and construction. So if steel prices are cut by 20 per cent, it would lead to reduction in pig iron prices which in turn will bring down iron ore rates as there is surplus iron ore production and it is a buyers’ market,” officials pointed out.

Increased railway freight rates, directly under Government control, too have contributed to rising steel prices. “In the present situation the railways too may be forced to bring down freight rates, but it is for the Cabinet Committee on Prices to decide,” sources said.