Four steel companies form alliance

Four steel companies form alliance

By SiliconIndia   |   Tuesday, 29 April 2003, 07:00 Hrs   |    2 Comments
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NEW DELHI: Steel Authority of India (SAIL), Tata Steel, Rashtriya Ispat Nigam Limited (RINL) and Indian Iron & Steel have formed an informal alliance to get real understanding of the 'market pulse'.

Strongly denying that the alliance is any form of business cartel, officials in these companies explained it as a 'loose understanding to exchange market intelligence'. Each individual company has its own marketing and pricing strategy, officials said.

The four steel companies, having dominant presence in the east and south had been meeting once every month for the last one year or so to exchange market trends and even discuss future steel outlook in both domestic and international steel markets.

Importantly, a national-level platform representing various steel groups -- the Indian Steel Alliance (ISA), was formed some years ago to look after the problem of the Indian steel business. The ISA, with members like SAIL, Tata Steel and three new generation steel makers -- Essar Steel, Ispat Industries and Jindal Vijaynagar Steel Limited -- is also making a parallel effort to look after the health of the Indian steel business.
On whether the monthly meeting between the four integrated steel makers can strictly be termed as cartel or not, steel marketing officials confessed that such interactions surely provides an edge in decision-making, particularly when it relates to eating into each other's territory or resorting to price under-cutting.

Due to the protective measures adopted by developed countries like the U.S., European Union and far eastern markets, the steel market has been fragmented in various regions. Officials in Indian steel companies believe that on a smaller scale, one should be aware of market requirements of various regions within the country too. Hence, it makes sense to exchange views and information about the market the companies cater to.

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