Tata Steel seeks to maintain price line

Tata Steel today said that there was no price hike in the offing despite the Steel Authority of India Ltd (SAIL) and Essar Steel raising their prices.

A company spokesperson said Tata Steel would continue to hold prices for 'bonafide OE customers' till end-March.

The company has, however, increased the price of galvanised corrugated sheets by Rs 2,000 a tonne and the price of cold-rolled coils by Rs 600 a tonne in the non-OE distributor segment. This segment, according to the company, represents a very insignificant portion of its top line.

The ruling price for HR coils is in the region of Rs 28,500 a tonne in the domestic market. It may be recalled that Tata Steel had in September last cut price by Rs 2,000 a tonne and the management had also committed to maintaining status quo on prices till March 2005.

Despite Tata Steel holding on to the reduced priceline, some other producers, which had reduced prices along with the company earlier, increased prices twice since. In December 2004, Jindal Steel and Power Ltd and Ispat Steel increased prices by Rs 450 and Rs 550 a tonne, respectively.

In a more recent development, pointing to an increase in inputs costs such as freight and diesel, many steel producers hiked prices in January.

Essar Steel increased price by Rs 500 a tonne, while Jindal increased it by Rs 750 a tonne. Ispat and SAIL increased price by Rs 400 and Rs 500 a tonne, respectively.

An Essar spokesperson said, "Between March 2004 and now, iron ore prices have gone up by Rs 250-300 a tonne, a 20 per cent increase. In the same period, price of coal has gone up by Rs 2,800-3,000 a tonne. Indian Railways has, through a re-classification of steel, increased freight rates by 15 per cent."

He also said that domestic price is still lower by Rs 1,500 to Rs 2,000 a tonne compared with the landed cost of imported steel. The price hike in domestic steel sector has become a contentious issue.

Many downstream end-users, including automobile and automobile component producers, have increased their product prices citing the surge in steel prices.

Effective from January 2005, Maruti Udyog Ltd, Hyundai Motor India Ltd, Ford Motor India and General Motor India have hiked prices between Rs 5,000 and Rs 20,000 a unit on a range of models.