THE LONG-TERM export contract of iron ore with Japanese and Korean steel mills may soon come under threat. Country's largest iron ore producer NMDC may terminate contracts with companies based in Japan and Korea unless buyers agree to pay substantially increased price for the ore. NMDC is forced to increase its price due to higher freight charges and the recently imposed advalorem export duty. The negotiations to renew long-term contract with Japan and South Korea is scheduled for the last week of this month.

Faced With Raw Material Price Hike, Both Primary & Secondary Steel Cos May Increase Rates Soon

AUTOMOBILE-makers and construction firms could face another round of cost push from next month. Taking a cue from primary steel or hot rolled coil (HRC) makers, leading secondary steel producers, including Bhushan Steel and Uttam Galva, are also looking at raising prices of cold rolled coils (CRCs) and galvanised sheets by 15-20% next month. HRC is used for making CRC, which is primarily used in the construction and automotive sector.

Tackle Demand-Supply Mismatch In Steel

Steel companies may hike prices after the three-month freeze ending August 7, since the government is not in favour of interfering in steel pricing. The industry had agreed to hold prices for three month after a price cut of Rs 4,000 a tonne, following a meeting with Prime Minister Manmohan Singh on May 7.

It was daggers drawn between the steel ministry and private producers today with the country's largest private steel maker Tata Steel slamming the government for its failure to ensure price cuts were passed on to end-users. The ministry, on its part, claimed that had it not intervened at first place, steel prices would have been higher by at least Rs 10,000 a tonne. It also warned distributors that those found profiteering would be strictly dealt with.

THE government and the steel industry locked horns on Wednesday, blaming each other for the soaring steel prices. While Tata Steel managing director B Muthuraman blamed the government for not playing a constructive and positive role to contain prices, steel secretary RS Pandey said the government has taken all possible steps to control inflation and the responsibility fell on steel companies that were still reaping high margins despite a rise in input cost.

IN A bid to curb the pricing freedom of steel manufacturers, the government is considering a price band for steel products, which would prevent price hikes beyond a prescribed ceiling. Going against the grain of economic liberalisation, the proposal is likely to be discussed at a meeting of the committee of secretaries (CoS) next week. The price band plan would institutionalise government control over steel pricing, setting the clock back to the licence raj days. Steel is a completely decontrolled sector now, with companies having full freedom to decide on prices.

Concerned that iron ore prices continue to rise and augment inflationary pressures on the economy despite the imposition of 15 per cent ad-valorem duty on its exports, the Committee of Secretaries (CoS) is likely to discuss tomorrow wide-ranging options on further disincentivising ore exports either by capping its overseas sale or enhancing the duty level to a considerable level to render exports unviable.

SANGUEM, JULY 13

Q1 PREVIEW Ishita Ayan Dutt / Kolkata July 9, 2008, 0:14 IST The first quarter of the current fiscal is likely to be a mixed bag for the steel industry, which was asked to cut prices by the government as part of the steps to contain inflation. Integrated steel makers such as Tata Steel, which have captive raw materials, may post better results than its peers because it was able to absorb a part of the cost increase in raw materials.