The domestic steel industry, hemmed in by high input costs and a hard rap on the knuckles by the government, feels it would be difficult to hold on to current prices beyond three to four months.
Sajjan Jindal, Vice Chairman and Managing Director of JSW Steel Limited on Monday said the steel industry would not be able to bear margin erosions beyond a certain period in wake of persistent rise in input costs such as iron ore and coking coal.
“We are willing to absorb the impact on margins for 3 to 4 months,” Jindal said.
Steel companies claim the long-term contract prices for international coking coal have increased by more than 200 per cent, while iron ore prices have increased 300 per cent, they said.
The government is mulling a reduction in import duty of steel to tame inflation that has remained over a worrisome 7 per cent in the last few weeks, have warned companies strict punitive action if found to be engaged in any form of price cartel.
Jindal denied that steel-manufacturing industry had entered into any kind of price cartel and said controls under the Essential Commodities Act was unlikely to have a major impact.