The government decided Timber price will rise

Tag : Steel Ceiling

There are talks and reports about possible further intervention ofthe government in the steel market. This may include the governmentdeciding on a price band within which the steel prices should move.
De facto, it means a ceiling. It is also heard that the governmentis actively monitoring export consignments of even individualcompanies. It is reported somewhere that it is also toying with theidea of bringing in a total ban on flat steel products.
How much of those will come true is difficult to say. But,seriously, if the government has such ideas, the problems with thesteel industry, or for that matter with the iron ore miningindustries, which has also been subject to increased tax pressure,will only rise.
Whatever the government might have claimed on the success of themeasures earlier taken, the fact remains that if steel prices camedown to some extent, the same was due to a slowdown in demandresulting from lower pace of growth in industrial production andconstruction as a part of the recessionary pressure the economycurrently faced with and the seasonal monsoon rains.
If the major producers have actually kept the prices lower than themarket could accept, the intermediaries rightfully would have takenthe benefit of that.
Now if you set a fixed margin for the traders, there will be onlytransactions in the black market and one should remain absolutelyclear that the final consumer is very unlikely to get the benefitof that.