The Hindu Business Line : Steel prices may go up by Rs 800-1,000 per tonne

New Delhi, Dec. 31 Increase in the international steel prices and rising input costs could see steel prices in the domestic market go up between Rs 800 and Rs 1,000 per tonne in January. Industry sources said that a decision by all the major producers would be taken in a day or two.

“Global steel majors had increased prices in the middle of December and Indian producers are also likely to take advantage of this price hike. Also, generally, there is a price hike in January and we expect the trend to continue this time also,” an industry source told Business Line.

The source added that the hike in the price of hot-rolled (HR) coils could be in the range of Rs 800 to Rs 1,000 per tonne. Currently, the domestic price of HR coils is between Rs 28,000 and Rs 29,000 per tonne.

Between January and December this year, steel companies hiked prices thrice, with the last revision in October, when prices increased between Rs 400 and Rs 800 per tonne across various products.

Another reason for the expected price hike could be the increase in input cost of various raw materials and also due to the rise in ocean freight. The prices of iron ore and coking coal increased by around 10-15 per cent in the last couple of months.

Recently, domestic mining giant and the country’s largest iron ore producer National Mineral Development Corporation Ltd (NMDC) had raised prices across all grades of iron ore by 47.5 per cent to Rs 1,783 per tonne. Before the price hike, effective October 1 this year, NMDC used to sell the ore with 64 per cent iron content at around Rs 1,209 per tonne.

This is, however, far less than the spot price of iron in the international market which is close to $130 and $135 per tonne.

“As per the long-term agreement with steel companies, we can increase prices in response to market price hikes, provided it increases above 25 per cent. However, the cost component of iron ore in the manufacture of steel is hardly around four per cent. So to say that because of the increase in the price of iron ore, the price of steel products has increased is not justified,” an official from NMDC told Business Line.

The company has also raised the prices of all the lump grades by Rs 574 per tonne.