Noting that it has no evidence regarding cartelisation in the steel industry, the Centre on Thursday said it was ?closely monitoring the movement in steel prices and will take appropriate fiscal measures if necessary.?
Pointing out that the steel sector in the country is deregulated and therefore the prices are determined by the interplay of market forces, minister of state for steel Jitin Prasada said in a written reply to a query in the Lok Sabha that ?at present the government has no formal proposal for setting up of a regulatory authority to contain the steel prices in the country.?
On the rise in steel prices, the minister said ?on the supply side, rise in price of steel can be attributed to a steep rise in the price of critical input materials such as iron ore, coking coal and metcoke in domestic and international markets. On the demand side, the mismatch in demand and supply is the main reason for the rise in steel prices.?.
He said as a result of deliberations with the steel industry, the major steel producers agreed to increase the allocation of steel to small and medium enterprises by 20% from 4.9 lakh tones to 6 lakh tones for 2008-09. Prasada added that the major steel companies decided to exercise self-restraint on export of steel products and also agreed to follow a transparent pricing system through regularly updated web-based price list. The secondary steel producers on their part have agreed to reduce prices of bars and rods to the extent possible, he said.