The Indian steel industry will take a decision on revising its prices after the goverment reviews the export duty on the alloy.
The steel ministry has sought a review of the export duty, sources close to the development said, and a final decision on prices would emerge once the issue is settled.
The notification, which happened over the weekend, caught the industry by surprise.
The government pegged the duty on hot rolled at 15 per cent, 10 per cent for cold rolled, five per cent for galvanised steel and 15 per cent for TMT bars.
"If the government decides to go ahead with the notification, the industry can review its price rollback, which it undertook to help the government rein in inflation," indicated some steel producers.
Even though the rollback was not conditional, the government has assured that it would not notify the export duty.
A television channel said this evening that Tata Steel has decided to hold prices for three months.
Steel companies without captive mines would not be able to absorb the cost if NMDC and KIOCL increased prices from April 1, sources said.
"We will review the pricing strategy. We will wait for the steel ministry to take up the matter and then take a call," said the sources.
One of the options could be to take a hit on the export front and reverse the rollback in prices announced recently.
Primary steel producers met the Prime Minister on May 7 and committed to reduce prices of steel products and hold them for the next three months.
Spot prices of flat products were reduced by Rs 4,000 a tonne, in addition prices of rebars and structurals being reduced by Rs 2,000 a tonne.
At the meeting, the producers also laid out a charter of demands, which included the matter of export duty. The industry urged the government not to notify the export duty.
Among the other demands were an ad-valorem duty of 15-20 per cent FoB (free on board) on export of iron ore and that NMDC should roll back increase of about 47 per cent in prices of iron ore (effective October 1, 2007) and should maintain the same prices post-April 2008.
The government-industry spat over prices has been going on since January when the steel producers raised prices in the wake of a surge in raw material and freight costs.
The industry has been facing a cost increase of Rs 8,000-14,000 a tonne over the past one year on account of a steep surge in raw material and freight costs.
However, at the behest of the government, the industry has rolled back prices three times since January.
