Financial Daily from THE HINDU group of publications
Monday, Aug 23, 2004
Corporate - Announcements
Tata Steel slashes prices by Rs 2,000
Mumbai , Aug. 22
TATA Steel has cut prices by Rs 2,000 a tonne from midnight Sunday.
The company has decided to reduce prices of all its major products in a bid to arrest the rising prices of steel and their end-products, Mr Ratan Tata, the Chairman of Tata Steel, was quoted as saying in a statement.
The prices of the company's major products range from Rs 25,000 to Rs 30,000 a tonne and this will be reduced by Rs 2,000 with immediate effect, a Tata Steel official clarified.
"It is expected that this price reduction will contribute in arresting or moderating the pressures on price increases by major users on their products. It is sincerely hoped that other steel manufacturers and members of the steel trade will display a sense of responsibility by rolling back their steel prices in the interest of curbing inflationary trends," Mr Tata said.
Tata Steel has endeavoured to hold prices during the year for its direct customers through long-term contracts and these prevailing prices were below those of its major competitors, the Chairman said.
However, there is a need to do even more, and Tata Steel is taking the initiative in displaying its corporate responsibility.
He said it is at such times that the industry must stand together and display moderation and desist from making exploitive profits in order to arrest the scourge of inflation, which could negatively impact the current growth rate in the economy.
However, officials of major other steel makers, such as SAIL, Essar Steel and Jindal Steel, said they cannot comment.
Analysts tracking the sector too were sceptical about other companies going for prices cut immediately.
Mr Sandeep Shenoy, Strategist at stock broking firm Pioneer Intermediaries, said the cut in steel price by Tata Steel is a commendable move to curb inflation, but other companies may not reduce prices soon unless forced by the government.
Steel prices are going up globally. South Korean steel major Posco has announced a hike in price from August.
It remains to be seen whether a price cut is sustainable for Indian producers and if so for how long, he said.
Steel prices have been increasing across the globe due to higher demand and rise in inputs cost.
Last Friday, the Union Government reduced customs duty on non-alloy steel, melting scrap for iron and steel and ships for breaking on Friday.
The move was to curb inflation, which is now close to 8 per cent.
At the beginning of this month, steel companies increased steel prices between Rs 500 and Rs 1,000 a tonne on retail sales of hot and cold rolled products.
The increase in prices was necessitated by the continuous upturn in input costs, traders had said.
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