Government rejects Steel Cos offer to cut prices
At a meeting of Minister of Trade and Industry Piyush Goyal, Minister of Steel RCP Singh and Minister of MSME Narayan Rane on Thursday, user industries such as auto component manufacturers, manufacturers of automotive products, engineering and exporters demanded that prices be lowered by Rs 4,000 per tonne. But the steel companies’ bid was for a smaller reduction, people familiar with the proceedings told TOI.
One of the ministers reportedly told industry players that the offer was unacceptable as the scale of the reduction was too small and suggested that it should be improved as an announcement will be made soon by the government. An industry source said the price drop could be in the range of Rs 2,500 to Rs 3,000 per tonne.
According to industry sources, in December the rate of cold-rolled strip is estimated at Rs 77,000-80,000 per ton, while for hot-rolled coils it is in the range of Rs 67,000-70. 000 Rs per ton.
âThese are required by the micro, small and medium-sized enterprises (MSMEs) of large steel producers, as billets, TMT bars and similar products come from secondary producers and the steel producers have made it clear that their commitment was not about long products, âsaid a source. .
In addition, steel companies, which have periodically raised prices and hit MSMEs hard, should also be content with monthly price adjustments. The original proposal was to go for a quarterly review but it was considered too long.
Small businesses complain that frequent price changes hit them hard, as they are often unable to recoup costs as prices have skyrocketed between when they receive the order and when it is ready to ship. .
While MSMEs have long called for government intervention, the government opted to keep a hands-off approach until Thursday.
Prices have moderated in recent weeks as exports slowed, industry sources said. In addition, iron ore prices also fell in December.