Indian steel makers agree to lower prices by 5-10 percent to fight inflation

Indian steel makers give in to government's demands despite seeing a cut in their profit margins

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However, the steel makers feel that inflation could be better controlled if the government withdraws the tax on steel exports and discourage iron ore exports by hiking the duties on them by 15-25 percent. They also suggested that allocation and renewal of iron ore and coal mines should be made for them on priority basis.

The rising prices of steel in India was only following the global trend, the steel makers said, adding that the rise in the costs of raw materials such as coal and iron ore over the past few years also led to the rise in steel prices.

Some steel makers also said that the steps taken by the government would not impact domestic prices but rather would hurt their profitability. According to Navin Jindal of Jindal Steel and Power Ltd, a cut in steel prices would hurt its profit margins. "But how much is a matter of calculation," he said.

The government statement said the authorities would look into the proposals of the steel makers.

Steel prices have risen by more than 40 percent globally during the past one year but surge in prices of inputs like iron ore and coking coal have put pressure on the profit margins of steel producers worldwide.

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