Tuesday May 13, 07:53 PM
India seeks price, export data from steel firms |
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MUMBAI (Reuters) - The Indian government has asked top steel makers for data to verify if they have kept their promise to restrain exports to cool prices, while Tata Steel said it would hold prices for three months.
Last week, top companies including Tata Steel and Steel Authority of India Ltd bowed to government pressure to reduce prices but urged authorities to discourage iron ore exports and withdraw a tax on steel exports.
Tata Steel said on Tuesday it would not raise prices for three months.
"We have promised to keep steel at the reduced price for three months. We will keep that promise," Managing Director B Muthuraman said in a statement, adding the company was responding to media queries on the government's move to tax steel exports.
The steel ministry has now asked top producers to display prices on their Web sites and provide details about exports last year and in 2008.
In a letter to chief executives of seven leading steel companies, obtained by Reuters, the steel ministry said this information was needed to examine some of the demands made by producers in a memorandum submitted to the government last week.
The ministry also reminded the companies they had told the government that only 25 percent of their output was committed to long-term contracts, for which prices would not be reduced.
One industry official said while restriction on long-term contracts were discussed with government officials, putting it on paper was "prohibitive in nature".
Pawan Burde, senior analyst with Angel Broking, said long-term contracts accounted for about 25 percent or slightly higher, of the output.
"Either the government will have to roll back the taxes or the companies will be forced to raise prices," Burde said.
An official at a steel firm, who did not want to be named, said producers were waiting to hear from the government about their demand to discourage iron ore exports and to withdraw the export tax on steel.
"The government has not mentioned any of the issues raised by us," he said.
"We will wait for some more time... We will be forced to raise prices," another industry official said.
Global steel prices have risen about 40 percent this year, but the price of inputs such as coking coal and ore have surged more, putting pressure on profits worldwide.
(Reporting by Arpan Mukherjee)
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