Steel prices up Rs 1,500/tonne

Leading hot-rolled steel producers, including Steel Authority of India Ltd, Tata Steel, Essar Steel, Ispat and Jindal Vijaynagar Steel, have decided to raise prices by Rs 1,400-1,500 per tonne from the first week of January, citing increased input costs.

This is the steepest hike in hot-rolled steel prices in the past year. Hot-rolled steel prices in the country will now stand at Rs 21,250 per tonne, the highest in the past five years.

The steel majors said the prices of key raw materials like coke, nickel and iron ore had gone up recently, forcing them to raise their prices. According to the Indian Steel Alliance (ISA), the rise in hot-rolled steel prices was less compared to the rise in prices of raw materials.

"While input costs have gone up 98-200 per cent, the increase in steel prices has been only 25-30 per cent," said an ISA functionary.

Coking coal prices had risen 92 per cent to $230 a tonne, while iron ore prices had gone up 178 per cent to $50 a tonne between December 2002 and December 2003, industry sources said, adding that freight charges had increased 150 per cent to $30 a tonne during the period.

The sources indicated that the steel producers could have been emboldened by the prospect of a vote-on-account instead of a regular Budget due to early elections.

The government had said there was a case for bringing down the 25 per cent import duty on hot-rolled steel in the coming Budget if domestic prices went up significantly. Today's price hike could result in prices of cold-rolled steel going up by Rs 1,800 per tonne.

"In the past year, steel prices increased around 49 per cent. The biggest problem is the prices are unpredictable. It is happening too frequently and is also impacting our suppliers," K K Swamy, deputy managing director, Toyota Kirloskar Motor, said.