Domestic steel prices may spurt by 7%

Indian steel makers are likely to raise prices by up to 7 per cent from September in line with a global price rise, and in response to easing inventories and strong domestic demand, industry officials said on Wednesday.

Prices of various grades of hot-rolled steel could go up by Rs 700 -1,500 ($16-$23), after a drop of nearly 25 per cent in the past quarter.

Sheshagiri Rao, director-finance at JSW Steel, said that domestic steel manufacturers were expected to increase steel prices by Rs 700-Rs 1,000 by the first week of September. "Indian steel prices follow the international trend. Right now the international steel prices are firming up with the steel inventory getting lesser and lesser as a result of good economic activity in China, US, Middle East and India. Even the European steel consumption is picking up. All of this indicate that Indian steel prices are going to increase in the near future," said Rao.

A Steel Authority of India (SAIL) official said that there was buoyancy in global steel prices that could impact domestic prices. "The company would review prices at the August-end," he added.

Tata Steel, however, said it was relatively insulated by a rise or fall in steel prices. "About 75-80 per cent of our sale is through contracts, which is decided at pre-determined prices. As less than one-fourth of our sales are meant for general markets, we are not affected."