Sail & Tatas to freeze steel prices

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Wednesday, April 23, 2008 at 2358 hrs Responding with alacrity to tough talk by the UPA administration’s top brass, two of the country’s largest steelmakers—state-owned behemoth Sail and private sector giant Tata Steel—on Tuesday agreed to freeze steel prices. Steel and cement producers have been chastised for fuelling the current spurt in inflation.

Speaking at a function in Jamshedpur to celebrate Tata Steel’s centenary, the Prime Minister impressed upon India Inc the need to behave more responsibly. “In the present context, where industrial prices are on the rise, there is an opportunity for corporate leaders to deploy corporate power in the best interests of society. Stable growth, with reasonable prices, can in fact widen and deepen the market for industrial products and, in turn, benefit business,” he said.

“I would advise our steel industry to take a long-term view and not fall prey to the temptation of seeking windfall gains from market manipulation in a period of excess demand. The Indian economy will continue to grow and the demand for steel will continue to grow. Industry and trade must eschew short-term gains that hurt consumers and disrupt the stability of the process of economic growth,” the PM said.

That exhortation, clearly, had the desired effect. “In view of the suggestions made by Prime Minister Manmohan Singh here today during Tata Steel’s centenary celebrations function, Tata Steel will hold the prices of its steel products at current levels for the next two to three months,” said a Tata Steel release in Jamshedpur, quoting managing director B Muthuraman.

Public sector steel major Sail also reacted within minutes of the PM’s speech with a statement that “Sail has given an assurance to the Prime Minister that in spite of the pressure of rising input costs, Sail shall continue to hold the price-line for two to three months or so”. Sail has also promised the PM that it is taking all steps to improve production and efficiency.

Earlier in the day while responding to questions in the Rajya Sabha, finance minister P Chidambaram reiterated his view that cement manufacturers and, to some extent, steel producers, are behaving like cartels. “MRTPC is conducting an inquiry into the allegations of cartelisation. We are looking at legal and administrative provisions that are available to the government,” he said.