Steel producers have limited exports of steel products to meet the domestic demand because of the administrative controls put by the government. Retail prices of flat and long steel products have surged about 25% in the domestic market in over month.

Leading steel producers including SAIL, Ispat Industries, Jindals and Essar Steel, held separate meetings with steel ministry officials apprising them of their moves aimed at improving domestic supplies. On Thursday, a Formal Meeting of steel producers with ministry officials is expected.

According to latest data compiled by Joint Plant Committee (JPC), authorised by the ministry of steel, TMT bars (10mm) were selling at Rs 38,200 per tonne in Delhi's retail market as on May 16, while the rates stood at Rs 47,800 per tonne on June 16, registering a Rs 9,600 increase in prices.

With the fear of return of government fiscal and administrative controls to check present price rise, the steel companies have sprung into action on the price front.

Steel Authority of India Limited (SAIL) on Tuesday said that it maintained the prices for the domestic market during the month of June at the same level as that of May, in line with its commitment of holding the price line.

Ispat Industries have decided to restrict supply of steel to secondary producers for exports and further increase supply for domestic sale to improve domestic availability of steel and soften prices.  “Prices of some of the steel products have again started rising in the retail market in the last one week to 10 days, negating primary steel producers’ decision to hold any such increase till early August,” said an official of Ispat Industries, adding the measures would result in Rs 2,000 per tonne reduction in price of steel with immediate effect.

Many other steel companies have also informed Government that they are exerting pressure on the retailers to sell steel products at reduced prices and prevent any speculative hoarding.

The present price rise is being attributed to a mix of international and domestic factors where global price of steel remains firms and over $200 per tonne above domestic prices. Moreover, retailers are understood to have created artificial scarcity in the market suggesting availability problems on account of few steel mills closing operations for annual maintenance.