Mumbai: Major steel producers have assured the government that they will not increase product prices even in July though retail prices of steel have started moving up during the last seven to 10 days.

In May Major steel producers in the country, including SAIL, Tata Steel, JSW Steel, Ispat Industries and Essar Steel, have agreed to bring down prices of hot rolled coils by Rs4,000 a tonne to help fight inflation, (See: Steel makers agree to cut prices by Rs4,000 a tonne) 
after agreeing to roll back prices of long steel products by Rs2,000 per tonne and galvanized corrugated steel by Rs500-1,000 per tonne in April (See: Steel makers agree to cut prices by Rs2,000 per tonne)

Expressing concern at the price spike, the Steel Authority of India Ltd (SAIL), the country's largest  producer,  said the company ''has received reports, including reports in the print media, regarding increase in the market prices of steel during June 2008, particularly during the last week.''

SAIL, however, had maintained its prices for the domestic market during June at the same level as that of May and will maintain the same price level for July also, the release said, adding the company had, in fact, increased supplies to the domestic market by 32 per cent in June this year compared with June last year.

SAIL's June sales of TMT bars and hot rolled coil stood at 74 per cent and 20 per cent, respectively while for the April-June quarter, SAIL's supplies of TMT bars, hot rolled coils and galvanised plain/corrugated sheet to the domestic market have gone up by 55 per cent, 16 per cent and 30 per cent, respectively, the company said in a release.

Supplies to the domestic market as a whole have gone up by approximately 9 per cent during the first quarter, the release added.

''It has been brought to (our) notice that prices of some of the steel products have again started rising in the retail market in the last 7-10 days, Ispat Industries said in a statement, adding the company has decided to restrict supply to secondary producers for exports, while increasing supplies to domestic users and initiate measures to force retailers to sell steel products at reduced prices.

''These moves could bring down hot rolled steel prices by around Rs2,000-2,500 a tonne at the retail level,'' an Ispat official said.

The steel ministry had discussed with steel produces measures to control product prices, which have risen despite pledges to boost supplies.

The government would verify whether steel firms had maintained prices in line with a guarantee given in May, and increased supplies to the local market, the officials said.

Steel produces had agreed to hold prices for three months to help the government fight rising inflation, and companies including state-run Steel Authority of India and Tata Steel had cut prices by 5-10 per cent.

However, average retail prices of hot-rolled coils have increased by about nine per cent since mid-May, according to data collected by the Joint Plant Committee (JPC) of the steel ministry.

Provisional data from the JPC showed, steel consumption rose by 10.7 percent in 2007/08, while production growth was lower at 5.1 percent. The gap was met through 7.18 million tonnes of imports.