Domestic consumers of flat steel products tie up with domestic flat steel producers and govt. to formulate a rational pricing policy

In view of the steep hike of around 44 per cent in hot rolled (HR) steel prices, domestic consumers of flat steel products have collaborated with domestic flat steel producers and government to formulate a rational pricing policy.

The united forum which will make its first representation to the government by the end of January will have members from the cold rolling industry, pipe and tube industry, cycle industry, automotive sector and steel furniture industry.

The unprecedented increase in steel prices and fall in global capacity are some of the issues that we will be initially talking to the government, Murugappa group marketing director A Vellayan said.

Domestically produced HR coil prices increased from Rs 11,500 per metric tonne in March 2002 to Rs 17,000 per metric tonne in January 2003. According to officials at the forum, HR coil producers pursue global price trends only when prices rise.

Pricing strategies should be based on the principle of what the Indian market can absorb rather than short-term profiteering in global markets destabilising the Indian industry and the industrial and economic growth of the country, stated Cold Rolled Steel Manufacturers Association executive director SC Mathur.

Global capacity has dropped by almost 30 million tonne annually further intensifying the shortage which has directly hiked global steel prices.The forum will also create an action plan for the import duty structure on steel. This will include clauses on the non-tariff barriers, floor price on imported steel and the anti-dumping duty.

The forum will also seek the removal of non-tariff barriers imposed on imports of HR coils vide directorate general of foreign trade (DGFT) notification No 44 and termination of the minimum floor price for HR coils. It will also debate whether there should be a two-tier or three-tier duty. In the case of the latter, they should arrive at a definition of raw materials, intermediary and finished products.