Steel companies to cut prices again

Desperate situations call for desperate measures. Looks like that is what the Government also seems to be thinking, as it grapples with a spiraling inflation, which is running at a 42-month high. In a latest move to quell inflation, the Government asked steelmakers to reduce prices for a second time in as many months. Prime Minister Dr. Manmohan Singh persuaded steelmakers last month to freeze prices to help combat inflation. Steel companies agreed to cut prices of flat products by Rs4,000 per ton and that of long products by Rs2,000 a ton. These reductions will be applicable for all steel that gets consumed in India either directly or after further processing. Further, the steel producers will hold these prices for the next three months. The steelmakers told the Government that there should be no duty on export of steel products. They also demanded allocation and renewal of iron ore and coal mines on a priority basis and sought an ad valorem duty of 15-25% FOB on export of iron ore. Steel companies also said that railway freight on steel making raw materials and on steel products be maintained at current levels/classification. The Prime Minister appreciated the gesture of the steel industry and assured them of expeditious examination of their proposals.