Four leading steel producers Rashtriya Ispat Nigam, JSW Steel, Essar Steel and Jindal Steel and Power have increased prices of their products by up to Rs 1,400 per tonne for the current month.
Industry sources said that there is some upward movement in the prices of Steel Authority of India (SAIL) as well. However, this could not be independently confirmed.
An RINL statement said that the company has increased prices by Rs 500 per tonne for January, while a JSW Steel official confirmed that the company has hiked prices by about 2% or about Rs 750 per tonne across products.
On expectations that the steel market will improve and on signs of increase in demand, RINL has increased prices of its steel products by around Rs 500 per tonne in January 2013, the PSU said in a statement.
Essar Steel, which mainly produces flat products like hot rolled coils, has hiked prices across the board by about 3-4 per cent, industry sources said, adding that the increase translates into a hike of Rs 1,000-1,400 per tonne.
Sources added that Jindal Steel and Power (JSPL) has also raised prices by up to Rs 1,000 per tonne for January.
When contacted, spokespersons of both Essar Steel and JSPL declined to comment on the matter.
Meanwhile, a JSW official said that "we have increased prices after three months. This is about 2 per cent on all the categories and has become necessary due to increasing input costs".
Citing the reasons for hike, the official said JSW Steel has been buying low and inferior quality of iron ore at higher prices due to suspension of mining in Karnataka, Goa and Odisha, while its freight costs have significantly increased.
RINL and Essar Steel had increased their prices last month also. While RINL's hike of similar amount was across the board, Essar Steel had hiked prices for certain products only.
Before the hike, the ex-factory price was in the range of Rs 35,000-36,000 per tonnes for flat products like hot-rolled coils. For long products like TMT bars, the price was in the range of Rs 36,500-37,000 per tonne.
Improved business confidence, expectations of a surge in demand during the fourth quarter, firming up international prices and significant increase in input costs --particularly on iron ore and power purchases-- are the major reasons for hike in domestic steel prices, industry sources said.
They added that most of the steel makers are also not enthused with NMDC's move to cut the iron ore lump prices for January by about 5.9 per cent due to the feeling that the raw material price is still "too high".
The increase in Hot-Rolled Coil (HRC) price, which is considered as the benchmark flat product, may also impact the end-use segments like automobiles and consumer durables. Flat steel products have a 2.61 per cent weightage in the wholesale price index.