Wed March 7, 2007 – Finance minister P Chidambaram may have arm-twisted steel companies to roll back their post-Budget price hikes, but stainless steel is expected to still cost more.

According to stainless steel makers, the spiralling cost of nickel, the main raw material for stainless steel, has held them back from rolling back the price hike of up to Rs 10,000 a tonne announced on March 1.

"Last year, nickel was priced at $14,000-15000 a tonne on the international market against today's price of $44,000 a tonne," said NC Mathur, director of Jindal Stainless, which makes almost 40% of the country's stainless steel. Sail's Salem steel plant has also retained its higher prices.

Although stainless steel accounts for just 4% of total steel consumption in the country, a price hike directly affects the common man because it results in an increase in the prices of utensils.

"If the finance ministry reduces the customs duty on nickel and steel scrap from the present 5%, we will lower our prices," Mathur said. Stainless steel companies were expecting a customs cut in the Budget as part of the government's efforts to curb inflation. They said nickel did not attract any duty in the EU, Japan, US or Korea. It was just 2% in China, they pointed out.

Sail, Tata Steel, RINL, Essar Steel, Ispat Industries and JSW Steel on Monday announced a full roll back of Rs 300 to Rs 700 and of Rs 300 to Rs 500 on TMT bars and galvanised corrugated products, respectively.

These companies also rolled back the hike of Rs 500 on HR coils, though revised domestic prices continue to be lower than prevailing international prices.