December 02, 2008

Vizag dealers ask RINL to supply steel directly – Report

BL reported that Visakhapatnam Steel & Cement Dealers’ Association has appealed to the Rashtriya Ispat Nigam Limited to sell steel products directly to them at the plant level to eliminate middlemen and to bring down steel prices in the market.

Mr K Ganesh president and Mr N Venkateswarlu secretary of Visakhapatnam Steel & Cement Dealers’ Association said that the distribution system being followed by the steel plant is a faulty one and of the total steel production of 3 million tonnes, 1 million tonne is being sold through middlemen and the latter were charging a hefty margin.

They said that “Therefore, the steel retail prices are ruling high, as the long term contract holders were adding INR 5,000 to INR 15,000 to the plant price and as a result the steel dealers are unable to provide steel to customers at reasonable prices.”

They said the retail steel prices in the local market could be brought down by INR 10,000 a tonne, if the steel plant agreed to sell steel directly to them. At present, they said, the long term contract holders were buying steel at INR 35,000 to INR 40,000 a tonne from the plant and selling at INR 55,000 or so.

They said that “It is imperative to change the system at least now and Visakhapatnam Steel & Cement Dealers’ Association had passed a resolution on Sunday evening to that effect and that they would strive to change the system.”