Domestic steel industry in India is facing tough time. The prices of raw materials are increasing day by day and the government is trying to stabilize the prices of final product (steel) under inflationary pressure.

JSW Steel’s vice-chairman and managing director, Mr Sajjan Jindal and Tata Steel managing director, Mr B. Muthuraman expressed concerns over global increase of steel prices.

Government had taken various steps to cut inflation in past six months to check the prices of steel. It had contributing to WPI around 3.63 percent. The government is now trying to impose price band on steel product as it fears increase in prices by steel companies. Steel companies are likely to increase prices of steel products in August at the end of three month moratorium between companies and government.

The steel players have described price band imposition as unfair and non-judicious. The steel makers have said that steel prices are about 30 percent less than international prices. Domestic steel prices have increased by 20 per cent while global prices increased by 50-60% in 2008. This price rise is due to increase in prices of raw materials such as iron ore and coking coal. Indian steel industry is dependent on importing as it has not sufficient reserves of coking coal. Thus industry is thinking on price hike of steel while government tends to avoid it by imposing price band.

Industry experts believe that imposition of price band would send negative impact on global investors and India’s domestic projects could be affected. They also demanded development of mining infrastructure and more blocks of coking coal and iron ore from the government.