August 30, 2008

Indian cold rollers allege arbitrary pricing by HR makers

It is reported that secondary steel producers have complained to the finance minister that after announcing conditional price reduction of up to INR 4,000 a tonne, the major steel producers, both in private and public sectors, have started to arbitrarily fix the ratio between the export and domestic sales of their customers in order to extract higher prices.

Cold Rolled Steel Manufacturers Association of India, in a letter to the Mr P Chidambaram union finance minister, has complained that the ratio between domestic and export sales are being arbitrarily fixed.

Mr SC Mathur ED of CORSMA said that the major producers are offering a portion of the total quantity at reduced prices and charging the pre reduction prices for the remaining quantity assuming that it would be used for export production.

Mr Mathur said that though the major producers are in no way equipped to monitor how much quantity is being exported by a secondary producer, they are charging higher prices by fixing arbitrary ratios which should immediately be stopped.

He added that "The secondary producers are trying to benefit from lower domestic prices and using Indian steel for making export products despite their commitment to the contrary to the government. If the government wants it can check out the customs data and take penal measures."

It may be noted that major steel producers, while announcing the price reduction earlier this week after a meeting with the Prime Minister, had made it clear that the reductions would be applicable only for steel that gets consumed in India either directly or after processing.