Thursday 14 February 2008

Indian Steelmakers Lower Prices on Government Concern

Steel Authority of India Ltd., Jindal Steel & Power Ltd. and other steelmakers in the country agreed to reduce prices for the second time in the past year, after the government expressed concern about recent increases.

Prices will be lowered by 500 rupees ($12.6) a metric ton for hot-rolled coils and 1,000 rupees a ton for construction- grade metal, Jindal Managing Director Naveen Jindal told reporters in New Delhi after a meeting with ministry officials.

Tata Steel Ltd., India's biggest steelmaker, Steel Authority, the second-biggest, and JSW Ltd., ranked No. 3, were among producers that raised prices earlier this month by as much as 2,500 rupees a ton to match global rates.

Prime Minister Manmohan Singh asked steelmakers to lower prices and cut import duties, and he has supported the central bank's move to keep borrowing costs at a near six-year high as rising prices may threaten the prospects of his Indian National Congress party in general elections due next year.

Record economic growth has stoked demand for industrial and farm commodities. Wholesale prices rose 4.11 percent in the week ended Jan. 26 from a year earlier, faster than the previous week's 3.93 percent and the most in five months, the Ministry of Commerce and Industry said on Feb. 8.