The meticulous scrutiny of the prevailing prices of steel in the global market does not suggest a quick decision on a new notification on steel import prices. Caution was prompted by conflicting petitions from different segments of the steel industry in the first two weeks of this month. The attempt of the Director General of Foreign Trade (DGFT) to revise the floor prices was also somewhat stymied by an interim order of the Calcutta high court on the floor prices for tinplate imports. The Union government is known to be scrutinising the legal implications of that order, which many interpret as a stay on the prevailing floor prices.

Prime grades of tinplates can now be imported at a price of $720 a tonne or more and tinplatewastes can be brought into the country at price not less than $ 545 a tonne. Some segments of government do not see the interim order as a deterrent to revising the floor prices, but the commerce ministry does not seem to be in a mood to take any step in a hurry, especially in the wake of the conflicting industry petitions at different corridors of power.

Even though it would be hazardous to guess the new floor prices for seven grades of steel at this juncture, it does seem certain that the import price band for steel would be reviewed periodically in tune with rates prevailing in the international market. SAIL and Tata Steel have pointed out at various fora that the very purpose of an import price bands was defeated if the floor moved in tandem with market rates.

The steel ministry has tacitly supported the viewpoint that the purpose of an import price band was to block imports below a price at which steel could be efficiently produced within the country. In imposing an anti-dumping duty on CIS materiallast year, the DGFT had considered SAIL's HR coils price of Rs 14,300 ($245) a tonne as the fair price.

In December last year, the DGFT fixed floor prices for importing seven grades of steel, based on prices prevailing in Europe and Japan between May and July. Since steel prices fell drastically in the world market since then, the May-July average evoked wide protests as an import floor price in December.

Steel prices have fluctuated violently since last year. Hot rolled coils prices for instance, plunged from $285 a tonne to $320 a tonne in May last year to $255 a tonne and less by October. By the time DGFT announced a floor price of $302 a tonne for prime grades of HR coils and $232 a tonne for seconds in December, the global prices for the materials were nearly $40 a tonne less.

Since then however, steel prices have perked up considerably, primarily because of anti-dumping duties and other tariff measures adopted by key steel consuming nations like the US. The US, which imports more steel than Indiaproduces (at close to 28 million tonne), has imposed a price band of $ 302 a tonne on HR coils imports from the CIS. Industry sources say steel prices had gone by nearly $ 30 a tonne since December last year. The new list of floor prices for HR coils, CR coils, hot rolled sheets, plates, cold rolled non-oriented (CRNO) steel, tinplates and alloy steel bars and rods, may be based on an average of the January to March steel prices prevailing in key markets around the world.

The grapevine says noises made by a DMK member of Parliament in the PMO last week prompted secretary, PMO, N K Singh to convene a meeting of steel producers.

The meeting was followed by several formal and informal petitions by industry at the Union ministries of steel and commerce, demanding different rates for importing steel. HR producers, now banded together in a club called Indofer Society and Cold Rolled Steel Manufacturers Association (CORSMA) had suggested vastly differing rates for the import price bands.