Expressing concern over the steel and cement industry indulging in cartelisation to jack up prices, the government is considering to appoint a regulator for it.
Union road transport minister Nitin Gadkari last week raised concerns that the rising prices are impacting infrastructure projects.
Responding to the Builders Association of India of Western Region, Gadkari said, “We are in the process of finding out a solution for that. I will take it to the Finance Minister and Prime Minister.”
CCI raids cement majors over cartelisation:
In December last year, the government's antitrust body Competition Commission of India (CCI) raided the offices of top cement manufacturing companies, including UltraTech Cement, Shree Cement, Ambuja Cement, ACC, Dalmia Cement, and Rockstrong Cement, over allegations of price coordination and collaborating levels of cement supply.
CCI was examining complaints of cartelisation by cement companies.
According to the reports, in 2012, the CCI imposed a total penalty of $1.1 billion on several cement companies for colluding to under-use their plants and create an artificial shortage of cement. An appeal against that decision is still pending.
Experts believe that the with government intervention the cement prices might cool off a little but no drastic change will be witnessed.
Rising Steel Prices:
Steel makers in the country have also raised the prices of benchmark hot-rolled coils (HRC; average monthly price) multiple times since August, rising by as much as Rs 13,800 per to Rs 51,050 per tonne in December (37 per cent on-year growth).
Crisil Research in its report said, “We expect steel prices to remain high in the January-March 2021 quarter with a sequential price hike of Rs 7,000- 8,500 per tonne. Consequently, flat steel prices are seen 14-15 per cent higher on-year this fiscal,” the ratings agency said in its research report.
The rising steel prices are affecting the small and medium enterprises, which are facing the brunt of this at a time when the outlook on consumption and recovery in the overall economy is still uncertain.
The Rs 34,000-crore domestic forgings industry says high steel prices have hammered the industry, which is now battling for survival.
V R Sharma, the managing director of JSPL last month reportedly said, "Steel prices have gone up in India but it is in line with global trends. Our costs have also gone up as iron ore prices have increased too."
"Steel companies have been carrying losses in their books for so many years and this (high prices) will enable us to offset those losses. You can punish us if there are unfair trade practices like hoarding of goods or cartelisation," Sharma added.
