India’s steel ministry officials will meet the nation’s top producers, including Tata Steel Ltd. and Steel Authority of India Ltd., on June 1 to discuss reasons for the increase in prices of some products.
The government is concerned about rising prices, Steel Secretary D.R.S. Chaudhary told reporters in New Delhi today. Prices of long products, used in construction, are higher than the flat variety, which is costlier to make, he said.
Manufacturers including Rashtriya Ispat Nigam Ltd. increased prices of steel used in constructing homes, bridges and power plants by about 8 percent this year, while flat products for cars and refrigerators are almost unchanged. Demand rose after the government raised spending to set up infrastructure projects and boost growth.
“Prices are being driven purely by market factors and some cost push is due to increase in excise duty and railway freight,” said A.P. Choudhary, chairman of Rashtriya Ispat. “There is good demand from the housing and construction sectors and we hope it will be sustained.”
The government increased standard excise duty rates from 10 percent to 12 percent in this year’s budget. The Indian Railways increased freight rates on commodities by as much as 20 percent in March.
Rashtriya Ispat expects a 20 percent increase in sales volumes during the year that started April 1, the chairman said.