The country's integrated steel producers, represented by the Indian Steel Alliance announced a Rs 1,500-2,000 per tonne cut in the price of hot rolled coil, and said they would pass on the benefits of the recent reduction in excise duty from 16 per cent to 8 per cent to the consumers.
This will result in an added saving of Rs 2,000 per tonne for users of hot rolled coils.
The announcement was made after Union Steel Minister B K Tripathy met representatives from the steel industry this morning and asked them to roll back hot rolled steel prices by Rs 4,000 per tonne. In the case of long products, the government is expecting prices to come down by Rs 1,000-1,400 per tonne.
"Steel producers have committed that there will be no shortage in the market and they will not increase prices till June. They have also assured us that they will export only after the domestic demand is met," the minister said.
The integrated steel producers stand to lose Rs 450-500 crore (Rs 4.5-5 billion) as a result of the price cut.
The steel companies told the government that a formula should be worked out linking domestic steel prices to raw material prices once the freeze on prices is withdrawn in June. "As a result, steel prices will move in tandem with the prices of raw material," a steel industry source said.
Steel exporters have also demanded the restoration of duty entitlement passbook benefits for them. "We will first look at the domestic supply and then think about restoring the benefits," Tripathy said.
Steel exporters also met Commerce Minister Arun Jaitley this evening to press for the restoration of duty entitlement passbook benefits, which were withdrawn last week.
The directorate-general of foreign trade has decided to freeze duty entitlement passbook benefits on all steel items, though the steel ministry has proposed a selective freeze.Officials said the government felt that with the excise duty cut, there was no option but to freeze duty entitlement passbook benefits on all items.