Trim tonic

New Delhi, Dec. 3: Steel Authority of India Ltd (SAIL) has decided to cut the prices of some of its products by Rs 1,200-1,500 a tonne.

Other steel makers, including Ispat, Essar and the Jindals, are expected to follow suit.

Last month, steel firms had cut prices by Rs 4,000-6,000 a tonne. Falling prices are expected to reduce inflation.

Firms are wary of piling up inventories because of a slackening demand, prompting them to cut prices. The softening of global prices have added to their problem.

Tata Steel had earlier said that prices could fall by more than 10 per cent in the October-December period. SAIL, too, had forecast falling prices. The industry has been enjoying high margins for several years.

Last week, the government had curbed the import of seamless steel tubes and steel pipes to protect local firms from cheaper Chinese products.

Steel firms in May had agreed to roll back prices by Rs 4,000 a tonne and hold them for three months. However, at the retail level, prices rose as many steel makers had cut back on the retail margins of dealers.

Earlier on April 3, the country’s top firms had agreed to cut prices by Rs 1,500-2,000 a tonne on products used for construction.

But soon after, barring SAIL and the Tatas, most of the other firms started to clamour for a price hike, citing higher input costs.

Subsequently, the government slapped a 15 per cent export tax on steel, cut import taxes on mild and semi- finished steel to zero and removed the 14 per cent countervailing duty on steel used in construction.