A day after finance minister P Chidambaram accused steel companies of cartel-like behaviour, one of the biggest user industries of steel — the automobile and automotive components sector — has demanded a meeting with steel honchos, in a bid to stem further price hikes. The automobile industry uses just about 3.6 per cent of the domestic steel output of 55 million tonnes (mt) but has considerable clout, given its estimated size of Rs 1,48,000 crore in financial year 2007-08. Steel prices have been on an upward spiral since last November, but have jumped by almost 30 per cent in just one month. In fact, steel producers are now pushing for another round of hikes.

The meeting, likely to be in New Delhi, will see CEOs of car makers such as Maruti, Tata Motors, Mahindra & Mahindra, Hyundai, Honda, Ford and General Motors seeking rational price increases by steel companies. Some of the big automotive component firms such as Sona Koyo and Asahi Glass too are likely to push for a moderation in prices. Major steel producers including state-owned Steel Authority of India Ltd, Tata Steel, Jindal South West, Jindal Power and Steel and Bhushan Steel will, of course, put forth a strong argument in favour of further increases.

The Society of Indian Automobile Manufacturers (SIAM) has already written to the steel industry’s apex industry body, Indian Steel Alliance (ISA) requesting a meeting of top CEOs of companies from both sides. “The price at which steel is being offered to us is inclusive of the 25 per cent export duty applicable in China and global freight and insurance costs. We want that prices should be fixed on a plant to plant basis,” said a Mahindra & Mahindra official. “Why should we pay international freight charges for steel that is produced and supplied domestically?”

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