MC EXCLUSIVE Tata Steel to respond to CCI probe, says pricing influenced by global movements not collusion

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• Tata Steel denies price collusion, blames global trends and input costs.
• CCI alleges price collusion by 28 steel makers, including Tata Steel and JSW
• Tata Steel to respond to CCI after receiving documents, says MD T.V. Narendran

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Tata Steel will respond to the Competition Commission of India’s investigation into alleged price collusion once it receives the full set of documents, managing director TV Narendran told Moneycontrol in an interview on February 9. The steelmaker has maintained that domestic steel prices are shaped by global trends and input costs rather than coordinated action by producers.

"The DG (director general) has looked at it and submitted a report, and CCI has a process. We will respond to the allegations once we get all the documents,” Narendran said, denying any allegation pertaining to cartelisation of steel prices.

Earlier this year, Reuters reported that an anti-trust probe initiated against 28 steel makers, including Tata Steel and JSW Steel, has found that these companies breached antitrust rules by colluding over pricing.

The CCI has also held 56 top executives, including JSW's managing director Sajjan Jindal, Tata Steel CEO Narendran and four former SAIL chairpersons, liable for price collusion over varying periods of time between 2015 and 2023, according to the CCI order, quoted by Reuters, in a report published on January 6.

"We will deal with (it) and it's a bit unfortunate that we've all been named and all that, but we will follow due process. The larger point we are making is steel prices go up and down. It is based on international prices. It doesn't depend on Tata Steel deciding in isolation," Narendran added.

He also pointed to the “transparency” of the steel market, with prices published daily across multiple benchmarks.

"Steel prices are published every day. There is a Mandi Gobindgarh price, there is a Raipur price...there are daily publications which carry the steel prices. So, it's a very transparent market where there are hundreds of players," Narendran said, adding there needs to be a deeper understanding of the way steel prices move up and down.

The CCI probe, launched in 2021, was initiated after steel prices climbed steeply after a surge in post-covid demand from the manufacturing businesses especially the auto sector.

The probe came after several real estate developers’ associations sought government intervention over spiralling steel and cement costs, which raised their construction costs by 10-20 percent. The watchdog raided some small steel companies as part of an investigation into the industry in 2022, Reuters reported, and later expanded the investigation to 31 companies and industry groups, from the initial nine companies that were highlighted by the builders.