JSW Steel switches to daily pricing for long products

Complains of pressure from input price fluctuations, rising imports

Faced with steep fluctuation in raw material prices, JSW Steel is fixing daily the sale prices of long products.

Normally, steel producers change product prices — long or flat — fortnightly or monthly. “The market is so dynamic that we cannot review prices once and then keep quiet for a certain period,” said Seshagiri Rao, group chief financial officer.

Other long steel producers — Steel Authority of India, Rashtriya Ispat Nigam and Tata Steel — continue the practice of periodically announcing the price.

In the past year, ore prices abroad have fallen 60 per cent. Since January, the prices of ore lumps have fallen 34 per cent. However, in India, government-owned NMDC has been keeping its ore prices relatively high, due to a supply shortage from closure of several mines. It has reduced ore prices but only by 28 per cent over the past year. From Rs 4,500 a tonne in March 2014, prices of lumps were Rs 3,250 a tonne in March 2015. Those of fines are Rs 2,460 a tonne from Rs 2,910 a tonne a year before.

MONTHLY PRICING NO MORE

• Normally, steel producers change product prices, long or flat, fortnightly or monthly
• Other long steel producers continue the practice of periodically announcing prices
• In the past year, ore prices abroad have fallen 60 per cent
• However, in India, govt-owned NMDC has been keeping its ore prices relatively high, due to a supply shortage

Steel companies were hoping for another cut in prices by NMDC this month from April but it has not done so, though a company official said these would be reviewed continuously.

“Steel producers in India are squeezed from both sides. While raw material prices remained elevated, steel prices kept falling over and above the ongoing weak demand in India. Apart from that, dumping from abroad has worsened our competitiveness. And, owing to physical barriers, we are unable to import ore to the required quantity,” said Rao.

India does not have adequate port handling facility for the 140 million tonnes required of yearly import of raw materials like coking coal and iron ore. Also, transporting the ore from port to steel plant is another big problem with imports, Rao added.

According to industry sources, steel import into India rose 71 per cent to a new record at 9.31 mt in 2014-15, from 5.45 mt in 2013-14. This, too, ensures producers are hobbled in passing on higher input costs to consumers.

Meanwhile, MS ingot prices moved up in Delhi by Rs 200 to close at Rs 29600 a tonne. Similarly, billet price jumped by Rs 200 to 26500 a tonne in Rourkela markets.