By Ram Vilas Paswan
Recently, Indian steel sector has received a lot of attention on account of rising steel prices in the domestic market, since February 2008. The prices rose as much as 40-50% between January and May 2008, when Government had to step in for inflation management in the steel sector.

But, I am happy to note that the Indian major steel producers have kept up with their assurance given to Prime Minister on 5th May and have maintained their prices until now. I hope the major steel producers will continue to support the Government in its effort in managing the ongoing inflationary trend in the country.

Until the Government stepped in, Indian steel prices used to be determined by the International Price, based on the landed cost of import. A sudden demand of steel in the international market combined with the sharp rise in crude oil prices caused Indian steel prices to skyrocket.

When the situation became a matter of concern Government had to resort to fiscal measures by way of imposition of export duty on certain steel products. Government also took certain other measures in last week of April, such as reduction of import duty to NIL on all non-alloy steel products and certain key raw materials such as zinc, ferro-alloys and metcoke as well as reduction of CVED to NIL on TMT Rods and Bars.

At the same time my Ministry had a series of meetings with major steel producers, secondary steel producers and various steel consumers discussing out the issues and problems. All this has led to dramatic effect in making steel prices stable in the domestic market. The difference between the landed cost of import and domestic prices now stands at Rs 13,000 to Rs 15,000 per tonne of steel. Had my Government not taken the right steps in time, the domestic steel price would have been higher by at least Rs 10,000 per tonne, over the current prices.

I again express my sincere thanks to the Indian steel industry and hope they would continue to support the efforts of Government in future. I and the Secretary (Steel) will also continue to listening to your problems and take appropriate actions in helping the industry in solving their various problems. I have also noted with concern that, certain dealers and traders have sold the flat steel products at higher than market price, taking advantage of the high demand in the retail market.

We will take up very severely with such market manipulations. We have already directed the PSU steel companies to keep a strict watch on such malpractices. I request the other producers to keep a similar watch on their retail and distribution network. A transparent price information combined with frequent publication in Press and TV media will go on a long way in eliminating the market manipulations by a handful of traders.

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