Major Steel producers SAIL, JSW and Essar today increased prices of their products by up to Rs 2,500 a tonne due to rising input cost in a move that could make automobiles and consumer durables costlier.
"We have increased steel prices in the range of Rs 2,000-2,500 a tonne mainly due to rise in raw material prices," Steel Authority of India Chairman S K Roongta told reporters on the sidelines of the SAIL Open Golf Tournament here.
Private Steel makers JSW Steel and Essar Steel too confirmed hiking their prices.
World's sixth-largest steel producer Tata Steel, however, said it has not yet taken a decision on raising prices.
JSW Steel Director Sales and Marketing Jayant Acharya said the company has increased the prices of its products by 5-7 per cent and will review the rates again in mid-April to fix the prices for the next month.
"It is a preliminary review. We are partly offsetting the rise in raw material cost pressure," he said.
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An Essar Steel spokesperson said, "The price increase is in the same range as of other steel producers. It is mainly due to steep rise in raw material prices."
The increase in prices by the companies is effective from April 1.
On the rising steel prices in the domestic market, SAIL Chairman said India will follow the rising global trend where the rates have gone up due to increase in prices of iron ore and coking coal--two key raw materials for steel.
when asked about the government's view on rising steel prices, Steel Minister Virbhadra Singh said, "There has been a spurt in steel prices recently but it is a temporary phenomenon and at present there is no inflationary concern due to that."
However, the Minister cautioned that measures would be taken to control the prices if it rise abnormally.
Global mining firms like Rio Tinto, BHP Billiton, Vale are in process of entering into new iron ore and coking coal supply contracts with global steel makers.
According to industry experts, mining firms are entering into iron ore supply contracts with steel makers for the April-June quarter at about $110-120 a tonne, which is 80-100 per cent more than the levels in 2009-10.
Coking coal supply contracts are reported to have been signed between Japanese steel mills and Australian miners--Rio and BHP--that acts as global benchmark at about $200 a tonne for April-June 2010, against last fiscal's $105-130.
Asked if SAIL has followed the global trend and signed coking coal contracts for the current quarter at USD 200 a tonne with mining firms, Roongta said, "...The global benchmark prices and practices are followed by SAIL."