Tata Steel, SAIL get freight fright as steel companies pin hope on FM's Budget

NEW DELHI: Rail minister Suresh Prabhu's push for freight hike had steel makers shaky on Thursday, more so when they are battling poor demand and surging imports. The pressure was visible on the bourses with SAIL (down 3.21 per cent) and Tata Steel (down 1.62 per cent) sliding.

Steel firms say the new rates will increase their costs and squeeze their already anaemic margins. "We are helpless because customers may not be able to absorb the increase,” said RK Goyal, managing director of Kalyani Steels. “Demand is very weak.” Companies like Kalyani Steels, JSW Steel and Jindal Steel and Power have been struggling with rising steel shipments from countries like China and Russia, forcing them to seek government help.

To make matters worse, steel makers have be hit by iron ore shortage and mining bans. Tata Steel and SAIL have been facing hurdles in Odisha and Jharkhand. Many firms have trimmed their ops.

These firms are now banking on finance minister Arun Jaitley for help, who is expected to raise the import duties on steel to help local companies.