Steel producers have agreed to stop spot exports to help check rising prices. The move comes in the wake of mounting government pressure to reduce steel prices, which was partly behind inflation flaring up to almost a 12-month high of 5.92% in the first week of March.
"In order to increase supply in the domestic market and as a temporary measure to disincentives exports, the industry extended support to the Government in reducing import duties on steel along with abolition of DEPB benefits on exports,” Moosa Raza, President of the Indian Steel Alliance (ISA), said.
Steel producers have agreed to restrain exports of spot steel while exports under long-term contracts would continue, he said.
"The producers assured the Government they shared concern over the rise in steel prices and its impact on the common man," Raza said. "All the producers said that all members of our alliance would restrain the export of steel products."
"Steel prices have been rising mainly due to the unhindered rise of input costs. Input costs are expected to rise further from April 1, 2008," he said.
Nearly 70% of Indian steel companies are members of the ISA. India exports 4 to 5 million tonnes of steel annually.
Indian steel producers have increased prices by about Rs5,000-7,000 per ton in the last three months, according to top industry officials. Tata Steel, the world's sixth-largest steelmaker, has raised prices twice this year, while others such as JSW Steel, Essar Steel and Ispat Industries have also increased prices this year.
At yesterday's meeting, the steel industry urged the Government to bring down the excise duty on steel to 8% from 14% and reduce import duties on inputs such as met coke, refractory, ferro alloy and zinc.
Steel Minister Ram Vilas Paswan had urged domestic steel firms to show restraint when considering price rises, and some newspapers reported that the Government was contemplating appointing a regulator for the steel industry to check price increases.
There were also reports that the Government could impose a tax on steel exports to curb domestic prices.
Meanwhile, the ISA also sought fiscal and physical measures to contain exports of iron ore and asked the Government to take necessary steps to facilitate establishment of additional capacity and augment local steel supplies.
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