Industry leaders believe that with the rollback of excise duty in Budget 2010-11, steel price hike is on the cards Demand for steel in In the Union Budget 2010-11, finance minister Pranab Mukherjee announced that around Rs 1,73,552 crore will be invested for infrastructure creation in the country, thereby accounting for more than 46% of total plan allocation. The major sectors of focus will be transport, power and housing. This measure to increase infrastructure investment in the Budget was cheered by the steel sector. Mr Chaturvedi further added that on account of brighter demand outlook, steel production is expected to rise to around 65 million tonnes (mt) in 2010-11 from the current 60-61 mt. Industry leaders and analysts opine that the ambitious target set by the Ministry of Road Transport and Highways (MORTH) to construct 20 km of road per day will give further fillip to the country’s steel industry. Steel prices to rise Appreciating prices of iron ore, coking coal and thermal coal in the global market has pushed up the overall cost of steel production. Furthermore, industry leaders believe that with the rollback of excise duty in the Budget, steel price hike is on the cards. “Post Budget, steel prices have witnessed an increase of around Rs 500-600 per tonne,” says S K Roongta, chairman of Steel Authority of India (SAIL). Moreover, Mr Chaturvedi confirmed that steel prices will go up further over the coming months. The pertinent question as to who will bear the excise duty depends very much on the forthcoming demand-supply scenario, feel industry leaders. Some private players opine that the excise duty to a certain extent will be borne by the companies and the end-users. Jeeta Bandopadhyay |
