Producers raise flat steel prices Rs 500-1,000 a tonne

Steel producers raised prices, mainly those of flat steel, by Rs 500 to 1,000 a tonne on Thursday.

"There has been a sharp fall in prices by about Rs 9,000-10,000 per tonne in the past year and we think this is not a rise but an adjustment," an Essar Steel source said.

Steel producers had informed buyers that revisions could be expected in phases over three months.

The demand for flat products is stronger than for long steel ones, and so the price revisions are mainly in the former, according to sources. Long-steel products are used in construction and infrastructure; flat steel is mainly used by the automobile sector.

"We will be reviewing prices between Saturday and Monday and so cannot comment immediately," said Jayant Acharya, director, commercial, JSW Steel. "We will look at flat products mainly, but the quantum of rise may not be big," he added.

Traders said all producers would raise prices in October. Producers usually review prices every month.

State-owned Steel Authority of India also raised prices by about Rs 700 per tonne in its flat division.

The industry has been facing low prices for a while as cheap imports from China, Russia, Japan, and South Korea flood the market. The government last month imposed a 20 per cent provisional safeguard duty on import of hot-rolled flat products of non-alloy and other alloy steel with a width of 600 mm or above for 200 days.

Of the total steel imports of 9.3 million tonnes in 2014-15, hot-rolled coils accounted for 25 per cent, India Ratings said.

After the safeguard duty, producers raised prices by Rs 2,500 per tonne towards the end of September by dropping discounts. Producers seemed to be getting back some pricing power, which could help them post better earnings in the third quarter, said analysts.