Steel firms spare OEM clients: price hike

Large secondary steel users can breathe a sigh of relief as hot rolled (HR) coil steel producers have clarified that the price hikes are applicable only for the trade segment.

Tata Steel, Essar Steel, Jindal Iron & Steel Company and Ispat Industries today said that prices of monthly and quarterly contracts with original equipment manufacturers (OEM) have not been revised. The steel companies had announced a price increase around Rs 500-1,000 a tonne in HR coil prices, to Rs 28,500-29,000 a tonne.

Senior Essar Steel officials said, "Prices of HR coils have not increased for OEM customers, as we have contracts with them, which were fixed at a certain price level on a quarterly basis. We will review these prices at the end of the current quarter."

Jindal Iron & Steel officials said, "The price increase announced yesterday has been made only for the retail segment."

Meanwhile, senior officials from Ispat Industries said, "We have not increased prices of our products, but have withdrawn price discounts in the spot market." A senior executive from a standalone cold-rolling company said, "Prices in non-trade segment have not been increased as of now. However, there is a possibility of an increase in long term contract prices in the next month."

A Tata Steel spokesperson said, "The price increase in our flat products is applicable to products sold in the trade segment, which forms around 15- 20 per cent of our total sales."

Around 85-90 per cent of the total sales of Essar Steel, Jindal Iron & Steel Ispat Industries are tied in long-term contracts.