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Govt rules out regulating steel prices

Ruling out any price band, the government says domestic steel prices should come down following the softening global trend.

business Updated: Sep 12, 2008 15:26 IST

Ruling out any price band, the government on Friday said domestic steel prices should come down following the softening global trend.

"We do not fix steel prices, and do not favour any price mechanism for the same. The government would like to play a facilitatory role," Steel Secretary PK Rastogi said on the sidelines of CII Steel Tube summit adding the domestic steel prices should further come down on the falling global trend.

However, he said fiscal measures were taken few months back when export duties were levied on steel products to increase its availability in the domestic market.

He also said miners have agreed for a long-term contract for supplying iron ore to steel companies but the talks between the two parties have not concluded yet.

"They (iron ore producers) have agreed for a long-term agreement. The government had held talks between the miners and steel producers and will be meeting again. The talks are still on," he added.

The government is for a long-term arrangement between miners and steel producers so that iron ore is supplied at a reasonable price, so that the price of the final product comes down, he said.

Moreover, Rastogi said there is a need to import over three million tonnes of steel to meet the rising demand.

"In the present fiscal, steel demand has grown by 12 per cent, but the production grew only by 6 per cent. There is a demand-supply gap of 6 per cent which needs to be fulfilled by imports," he said.

At present, the domestic steel production is about 55 million tonnes.