What are the steel companies raising prices by collusion? CCI has started investigation in this case. CCI or Competition Commission of India is now trying to find out whether the steel companies are not deciding steel prices by themselves!
Many people aware of this matter have told Moneycontrol that CCI has not received any written complaint in this matter. CCI has taken up the matter in suo moto whether the steel companies have colluded to influence the price.
However, sources have definitely told that there is a demand to check the rise in steel prices for the last several quarters. Especially companies in the auto and real estate sector, which use steel the most.
Union Road Transport Minister Nitin Gadkari had accused the steel companies of cartelisation in January. He then said, “Every steel company has its own iron ore mine and there has been no increase in labor and electricity expenses while steel prices are going up. I do not understand what is causing the rise in prices. is?” Later he also suggested that a regulator should be appointed for this sector.
Sources familiar with the matter said that the CCI is investigating whether steel companies are not raising prices by mutual alliances after June 2020. That too when the Indian government imposed import duty of $ 13.07 to $ 173.1 per tonne on imports of flat rolled, aluminum or zinc plated steel from China, Vietnam and South Korea. Since then, steel prices have halved so far, so CCI doubts whether companies are trying to raise prices by collusion.
In the budget this year, the government has exempted these products from anti-dumping duty till 30 September 2021. Along with this, the government has reduced the custom duty on import of semi, flat and long products of non-alloys to 7.5%.
When did prices rise?
By November 2020, steel prices had risen 45 per cent over the June 2020 level. Hot rolled coil steel prices had reached Rs 50,000 per tonne. A similar boom was seen in TMT bars and other steel products.
In December 2020, rating agency CRISIL said that steel prices could rise further to Rs 13,800 per tonne. On the Budget day on 1 February, steel prices increased by Rs 1500 per tonne. SALE and JSW Steel had raised prices. On the other hand, the prices of TMT bars declined to Rs 3500 per tonne.