The Hindu Business Line : Steel majors hike prices by up to Rs 1,500/t

The largest domestic steel manufacturer, Steel Authority of India Ltd has increased the price on its long products by Rs 500 to Rs 700 per tonne. Rashtriya Ispat Nigam Ltd (RINL), the holding company of Vizag Steel Plant, on the other hand has increased the prices of its products by Rs 800 to Rs 1,500 per tonne.

An RINL official told Business Line that the prices of round steel products has been increased by Rs 800, while on the thermo mechanically treated (TMT) bars there has been a hike of Rs 1,000 per tonne. On semis, the company has raised prices by Rs 1,200 per tonne and on structural products the price increase has been between Rs 1,200 and Rs 1,500 per tonne.

“The increase in the ocean freight has resulted in rise of import costs and also the rise in the metallurgical coke and iron ore prices has made the company hike prices,” a company official said.

According to estimates, the prices of iron ore and coking coal increased by around 10 to 15 per cent in the last couple of months and the companies are paying close to $70 per tonne as ocean freight for a panamax vessel.

Meanwhile, the private players have increased the prices of their products by Rs 500 to Rs 1,000 per tonne.

Analysts point out that the increase in the prices of key raw materials has forced both the private and the public sector companies to hike prices.

Recently, 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, 2007, NMDC used to sell the ore with 64 per cent iron content at around Rs 1,209 per tonne.

“It is also the start of the busy season for the construction industry. Also, the major consumers will like to stock up products as they would look to spend the total budget allocated to them. So taking in to consideration these factors, companies have increased the prices. But this is just the beginning as we feel the prices could be at the highest in March,” he said.

Another reason for the increase has been attributed to the rise in the 10 per cent increase in the import price of steel products.

Between January and December last 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. Currently, the domestic price of HR coils is between Rs 28,000 and 29,000 per tonne.

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