PM warns steel makers against ‘windfall gains’

According to the PM, stable growth, with reasonable prices can, in fact, widen and deepen the market for industrial products. Pointing out that companies such as Tata Steel have a “proud record of corporate social responsibility”, he said that they can show the way forward in deploying corporate power for public interest.

Singh has only echoed the concerns of his cabinet colleagues — finance minister P Chidambaram and steel minister Ram Vilas Paswan — who have alleged that companies have been hiking prices indiscriminately and, in fact, indulging in cartel-like behaviour.

Responding to the Prime Minister, Tata Steel quickly announced it would hold prices for the next three months. Industry body Indian Steel Alliance maintained that it would cooperate with the government in its efforts to curb inflation.

“Last month, we took a unilateral decision to stop exports and have also supplied 15-20 per cent additional steel in March to correct the demand-supply situation,” said ISA president Moosa Raza. Denying the cartelisation charge, he said the industry has been affected by high coking coal and iron ore prices.

However, Tata Steel managing director B Muthuraman said in Jamshedpur today that the only way to contain prices of steel is by immediately creating new capacities in the country to match or even exceed the fast pace of demand growth unleashed by a liberalised economy. “Prices of everything from raw materials to energy inputs to ocean freight and consequently steel products have recently surged to unprecedented highs due to rapid steel demand growth from the developing economies, coupled with inadequate raw material availability,” he said.

He added that self-restraint on steel prices was being exercised amidst raising input costs by SAIL and Tata Steel.