NEW DELHI, MAY 14 : The automobile industry is unimpressed by the Rs 4,000 per tonne reduction in secondary steel prices and remains wary of the steel industry’s intentions. With steel prices shooting up by 50 per cent over the last four months, the auto and allied industries have been suffering serious cost over-runs. The automotive industry uses 6-7 mt of steel annually and while there will be some relief at the CR coil price reduction, the overall impact will be minimal.

“We expected a comprehensive solution to the issue but that does not seem to be happening. Still, we see this as a first step and, hopefully, other sectors like long products and alloy steel too will see some cuts in the future,” said Society of Indian Automobile Manufacturers (SIAM) director general Dilip Chenoy.

It was only after Prime Minister Manmohan Singh’s intervention last week that primary steel producers reduced prices while secondary producers agreed to do so today. The auto component industry, however, believes that the cuts have been sectoral and alloy steel, which was not touched by government intervention, has not been affected.

“As the customs duty on alloy steel has not been reduced to zero and export duties have not been imposed, steel manufacturers face no pressure to cut prices,” pointed out Asahi India Glass MD & CEO Sanjay Labroo.