The Hindu Business Line : Cold-rolled steel prices may head north

New Delhi April 8 Cold-rolled steel manufacturers are contemplating an imminent price increase in the range of Rs 2,000-3,000 per tonne across the board. The move follows the increase in the prices of hot-rolled steel, which accounts for 70-80 per cent of the cost of producing cold-rolled steel.

Some major producers have recently informed the cold rollers about the price increases.

According to the Executive Director, Cold Rolled Steel Manufacturers Association (Corsma), Mr S.C. Mathur, "No final decision has yet been taken and negotiations are going on with the suppliers of hot-rolled coil. The Government has requested the hot-rolled steel makers to check prices in the wake of rising inflation. And if hot-rolled prices do not go up, cold rollers too may hold prices."

Probable increase

Industry sources, however, told Business Line that the probable price increase is driven not just by increase in input costs but also because of higher demand from the consumer goods sector and the construction sector. Mr Ankit Minglani, Director of Uttam Galva, the largest manufacturer of galvanised steel in the country, said, "We are only converters of hot-rolled steel into downstream products. So, the price increase in our product would be a function of raw material costs (hot-rolled steel)."

When asked to quantify the likely amount of increase, Mr Minglani said, "As of today, it is not clear because negotiations are going on at various levels and there are serious Government concerns about steel prices. But it may be even more than Rs 3,000 per tonne."

However, he also said that even if demand goes up it would be difficult for the secondary producers to increase prices, as market will not accept it.

Currently, the average hot rolled steel prices is Rs 28,000 per tonne and cold rolled steel prices are at around Rs 40,000 per tonne, while galvanised steel prices are around Rs 50,000 per tonne.