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Govt convenes meet on steel prices

business Updated: Apr 16, 2010 14:27 IST
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The government has convened a meeting of steel producers next week to take stock of the rising price situation in the country, a top steel ministry official said in New Delhi on Friday.

"We have convened a meeting on April 22 of all the steel producers. We want to understand what's happening on the prices front," Steel Secretary Atul Chaturvedi said.

Asked if the government would ask steel makers not to hike prices further, he said, "Steel is a deregulated sector. We can't legally intervene and ask steel firms to freeze prices."

In 2008, the government had asked steel firms to refrain from hiking prices.

Steel prices have been moving upwards on the back of rising costs for raw material like iron ore and coking coal.

Steel firms have increased prices by around Rs 6,000 a tonne since February. At present, steel prices in the domestic market are hovering in the range of Rs 29,000-50,000 a tonne.

While the government is expected to try to persuade steel firms to rein in the prices of their products, the companies are contemplating a further hike in their rates.

Industry experts say that domestic steel is cheaper by at least 10 per cent than the landed cost of imported steel, at around $ 725-750 a tonne.

The steel secretary had earlier expressed hope that steel prices would settle down at the current level during this fiscal.

The input cost for steel-making has gone up due to a 90 per cent hike in the contracted rate for supplying iron ore during the April-June period as against last fiscal's level. The present contracted rate for iron ore is $ 120 a tonne.

Similarly, contract prices for coking coal have surged to $ 200 tonne, 50 per cent higher than the last fiscal.

Industry observers say that the steel firms are also trying to cash in on the steady rise in demand for their products from sectors like automobile and infrastructure.