Primary steel manufacturers want the Government to intervene and urge the secondary manufacturers to source their hot rolled steel requirement from domestic manufacturers instead of importing them.

 

With imports becoming cheaper following falling global steel prices, secondary producers are opting for imports and domestic hot rolled steel makers are piling up inventories. The producers are also ready to match the import parity price. The issue would come up at the National Steel Consumer Council meeting scheduled for Saturday.

 

Dual pricing

Simultaneously, with the private iron ore miners charging higher prices from domestic buyers compared to their Chinese buyers, steel makers would also raise the issue and urge the mining industry to do away with their dual pricing policy.

 

Import parity price had long been anissue between the primary and secondary steel makers. When global prices were high the secondary manufacturers, who use hot rolled steel for downstream manufacturing, had been complaining that primary manufacturers were charging import parity price although production costs of Indian HR steel makers were much lower compared to their international counterparts.

 

Output cut

“Prices are down and could go down further.

“Imports are increasing. Raw material suppliers are insisting on higher prices compared to their export prices.

 

If the situation continues, most companies would be going in for production cut,” said an official of a major producer.

 

“When we were raising prices, the secondary producers forced us to control prices by putting pressure through the Government.

 

“Now that the situation is quite opposite, the Government should step in to ensure that the downstream industry source their HR requirements from domestic manufacturers only,” the official pointed out. –Business Line