Steel cos avert curbs, agree to cut prices

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New Delhi, Apr 3: Steel companies and the government on Thursday worked out a plan that will ensure adequate supply of steel in domestic markets and spare curbs on current export commitments of the companies. The companies in turn agreed to reduce prices of long products, like TMT bars, by Rs 2,000 per tonne and corrugated sheets by Rs 500-1,000 per tonne. These products account for about 25% of the domestic steel demand.

The companies also agreed to use imported hot rolled coils to manufacture high-grade steel for exports. The meeting—attended by representatives of Sail, RINL, Tata Steel, JSW, Jindal Steel and Power Ltd, Essar, Ispat, Bhusan Steel & Power and the steel ministry officials—decided to exclude domestically produced HR coils from exports, thereby easing local supply constraints.

Sources said the decision will avert a 10% export tax on steel exports. Another proposal being toyed with is to scrap the 5% import duty on steels.

“Producers of long steel products like TMT bars, prices of which had increased sharply, have agreed that they will roll the prices back. It is expected that these companies, including Tata and state-run RINL, will provide a relief of Rs 2,000 per tonne to ensure that the common man is not hit,” steel secretary R S Pandey said after the meeting.

The companies have also assured that they would adopt a transparent pricing system and would regularly update their company portals on prices.

The companies also agreed to increase the allocation for the Small-Scale Industries Corporation from 4.9 lakh tonne to 6 lakh tonne. Further, the producers will bear transport charges of Rs 400 per tonne on top of the Rs 550 per tonne being given to small steel makers. The companies also gave an undertaking to enter into long-term contracts with small producers, with a minimum of three months.