It however, remains to be seen whether and to what extent the market can absorb the expected price rise.

Continuous inflow of cheaper steel products, mainly from Russia and other adjoining countries, till last month had kept the prices depressed. On an average, each month around 15,000-20,000 tonnes of steel products were imported. However, with announcement of the floor price to safeguard the domestic steel makers, imports are likely to come to a halt, steel traders say.

Currently, domestic steel prices are ruling at around 20-25 per cent below the landed cost of imports, sluggish demand, repurcussion from the user industry and continuous imports (till at least January this year) have all contributed to thereluctance of the domestic steel makers to raise prices and cover the price difference.

Now that one of the negative factors -- continuous inflow of cheap steel products in the country -- has been arrested by the commerce ministry, steel prices are likely to look up by early next month.

"We may see another round of mild price hike announcements," said a senior marketing official of Tisco requesting annonimity.

However, marketing officers at Essar Steel are still keeping their fingers crossed and feel that the expected price rise (to be announced by steel makers) has has to be gradual, else one may see the loss in volume sales.

Since the announcement of the floor price by the commerce ministry, there has been no bookings for the imported steel products, which otherwise were in the range of around 15,000-20,000 tonnes per month. The goods that came in the domestic markets were booked sometime in the last quarter of 1998. Of the booked orders prior to the announcement, a small quantity of around 500tonnes is likely to arrive this month.

"There has been no new booking of steel products in January," said Steel Chambers of India president SB Maroo, adding "the 7,500 tonnes of steel products that came last month, were booked prior ot the notification issued by the government".

Currently, barring those having advance export license, no one is placing any import orders, Maroo said. SD Gupta, one of the largest steel importer, said that currently banks are not willing to open an L/C account for imports of steel below the floor price. Even if one manages to open a clean L/C at lower price, the customs authorities would see to it that the imported products are not landed in the country as these would be lower than the announced floor price. Further, Gupta pointed out that there are around 150 steel importers spread allover India, of which 50-70 steel importers in Mumbai alone. With no fresh imports allowed below the floor price, most of the importers find themselves out of business. Unfortunately, the floorprice covers even those products which are not produced in sufficient quantity in India. Traders and importers feel, the government should relax import norms for cold-rolled grain oriented (CRGO) and cold-rolled non-oriented (CRNO) sheets (used for electrical goods industry) along with few fine grades of hot rolled (HR) used for automobile exteriors.

Nevertheless, the Indian manufacturers are quite happy with the imports of steel products finally coming to a negligible amount. So far the imposition of the floor price has not been able to really push up the steel price.

Despite the fact that current steel prices are 20 to 30 percent lower than the landed price of imports, most of the manufacturers are quite reluctant to increase their selling price by more than 5 percent to 10 percent, primarily on account of sluggish demand.