The Hindu Business Line : Steel industry says price hike forced by rising input costs

THE Indian Steel Alliance (ISA) has termed the allegations made against the domestic steel industry regarding rising steel prices as "unjustified and baseless."

In a statement here on Sunday, the Chairman of the Alliance, Dr Jamshed J. Irani, said the current prices only reflected "the increasing cost of production" and the right approach would be to ensure that necessary steps are taken to make available quality raw material to the industry at realistic prices.

The increase in prices of Indian flat products was being mainly driven by higher input costs. Between December 2002 and February 2004, the international price of coke has gone up from $120 (Rs 5,400) per tonne to $465 per tonne, while those of melting scrap, pig iron and iron ore have corresponding risen from $110 to $355, $110 to $340 and $28 to $48.50 per tonne, respectively. Added to these, the cost of freight (Cape size from Brazil) has soared by 400 per cent from $9 per tonne in December 2002 to $45 per tonne.

"These price increases have largely been attributed to increased demand for these commodities in the international market and, in particular, from China. These increased input costs have forced the steel players to increase prices to prevent them from being unviable," the statement added.