Paying no heed to the Centre's decision to remove the 16 per cent countervailing duty and four per cent additional Customs duty on imported Portland cement, local cement producers today decided not to drop prices, though the move unnerved the steel industry which saw it as a pre-emptive measure against its proposed price hike.
The country's leading steel companies were considering a price increase of Rs 1,000-2,000 per tonne from April 1, despite a partial rollback last month.
But now they appear to have gone into a huddle, though there has been no direct communication from the government on price increase, industry sources said. "Who needs any kind of communication after yesterday's move on the cement sector?" the sources reacted.
Market sources said Minister of Steel Ram Vilas Paswan had requested the industry not to hike prices. Last time when the prices were rolled back, the minister had met the chief executive officers of the major steel companies.
The cement industry, on the other hand, came round to the view that despite the withdrawal of the countervailing duty, imports would be insignificant.
"In January, the government had announced nil duty on cement imports. However, no imports took place. Why should the industry cut prices?" says EN Murthy, secretary general of the Cement Manufacturers' Association.
"I am sure that no imports will take place as there are infrastructural and logistical problems in importing a commodity like cement," added KC Birla, president and chief financial officer of Ultratech Cement.
However, the industry has not decided to go back on the one-year price freeze commitment given to government in March.
Cement stocks, which were hammered in the morning session in the stock exchanges, recovered sharply on analysts' reports that imported cement may not be cheap even after the duty cuts.
