HomeBusinessGovt rejects steel cos’ offer to lower prices - Times of India

Govt rejects steel cos’ offer to lower prices – Times of India

NEW DELHI: The government has rejected the steel industry’s proposal to lower prices on several products by Rs 1,500 a tonne for small businesses and exporters and has instead asked it to improve the offer.
At a meeting of commerce and industry minister Piyush Goyal, steel minister R C P Singh and MSME minister Narayan Rane on Thursday, user industries such as auto components players, engineering goods makers and exporters demanded that prices be lowered by Rs 4,000 a tonne. But the offer from the steel companies was for a lower reduction, sources familiar with the deliberations told TOI.
One of the ministers is learnt to have told industry players that the offer was unacceptable as the extent of reduction was too low and suggested that it should be improved as an announcement will be made by the government soon. An industry source indicated that the price cut may be to the tune of Rs 2,500-3,000 a tonne.
According to industry sources, in December, the rate of cold-rolled strips is estimated at Rs 77,000-80,000 per tonne, while for hot-rolled coil it is in the range of Rs 67,000-70,000 a tonne.
“These are required by micro, small and medium enterprises (MSMEs) from large steel producers as billet, TMT bars and similar products are sourced from secondary producers and steel producers made it clear that their commitment is not for long products,” a source said.
Besides, the steel companies, which have been periodically raising prices and hitting the MSMEs hard, are also likely to settle for monthly price adjustments. The original proposal was to opt for a quarterly revision but it was seen to be too long.
Small businesses have been complaining that frequent price changes have hit them hard as they have often been unable to recover the costs as prices have shot up between the time they get the order and when it is ready to be shipped.
While MSMEs had been demanding government intervention for a long time, the government had chosen to keep a hands-off approach until Thursday.
Prices have moderated in the last few weeks as exports have slowed down, industry sources said. Besides, iron ore prices have also come down during December.

Stay Connected
Must Read
You might also like


Please enter your comment!
Please enter your name here