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February 27, 2007 13:32 IST
Rising demand and fiscal incentives like customs duty cut helped steel prices firm up during the current fiscal and steel utilities to fetch better price for their produce, the Economic Survey said.
Domestic prices of steel, which declined throughout 2005 and at the start of the current fiscal, have firmed up during the first three quarters of 2006-07, the document tabled in Parliament said.
"The price rise has been stronger in case of flat products, where most of the key items saw marked rise in October 2006 from a year ago... the increase has been mainly because of the strong domestic demand for steel and increase in cost of raw materials like zinc and ferro-alloys," it said.
To ensure availability of steel and price stability, government reduced customs duty on alloy and non-alloy steel items, it noted.
Customs duty on alloy and stainless steel, earlier cut to 7.5 per cent and five per cent respectively, was made a flat five per cent in January this year.
The Survey said growth in the sector was impressive with a year on year increase of 9.7 per cent in production.
Total carbon steel production in the year touched 35.65 million tonnes and domestic consumption stood at 31.45 per cent, up 9.8 per cent year on year. Exports in the year grew nearly 11 per cent at 3.50 million tonnes, it said.
Improved operational parameters and modernisation of steel plants in the country has increased competitiveness of the sector globally.
Economic Survey 2006-07: Complete Coverage
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