Steel prices are all set to rise by about Rs 1,000 per tonne by early next month due to recent increase in excise duty and hike in iron ore freight rates, leading firms indicated today.
"The cost push due to increased duty and iron ore freight rates is Rs 1,000 per tonne. So, it (price increase) will not be less than that. This will get reflected (in prices) by the end of this month," Essar Steel (India) CEO & MD Dilip Oomen told reporters here on the sidelines of a conference organised by information portal Steel Guru.
Other leading producers, RINL, JSW Steel and Jindal Steel and Power (JSPL) also echoed similar sentiments.
"Freight (on iron ore) has been increased, excise duty is up, cost has has gone up by Rs 1,000 per tonne. So, ultimately this will have to be paid by the consumers," JSPL Deputy MD & CEO (Steel Business) VR Sharma said.
Rashtriya Ispat Nigam Ltd's (RINL) Chairman AP Choudhary said that his company has not decided the extent of price hike but it is on the cards.
"We can absorb the impact to a limited extent. In a month, cost has increased very much due to recent policy changes. This will get reflected in next month's price but we have not yet decided on extent of hike," he said.
Confirming the move to effect a price hike, a senior official of the JSW Steel said, "it is on the drawing board, a decision will be taken by next week and the hike will be effective early next month."
In the Budget for 2012-13, announced last Friday, the Finance Minister Pranab Mukherjee has increased excise duty rate from 10% to 12%.
Besides, the Railways had also increased freight rate on domestic iron ore transportation by 20% on March 6 to meet its revenue earnings targets, which was hit by the ban on export of the vital steel making raw material in the states like Karnataka and Odisha.
Steel prices, which have been on an uptrend in the last few months, are presently hovering in the range of Rs 36,000-37,000 per tonne. Price increase has been particularly witnessed in the long products, which are mainly used by the construction sector.