Galvanised steel firms hike prices

On the back of increasing input costs, producers of galvanised steel today announced a price hike ranging from Rs 1,000 a tonne to Rs 1,600 per tonne.

JSW Steel was the first in the day to announce a Rs 1,000 hike. The company had last increased prices in October 2005 by Rs 500 a tonne.

Later on the day, Uttam Galva also announced that it has hiked prices of its galvanised products by up to Rs 1,600 a tonne.

A spokesperson of another manufacturer, Ispat, said the company has also decided to hike prices for the Maharashtra market by about Rs 1,000 a tonne. The price hike announced by the companies will take the average price of galvanised steel to about Rs 34,100 a tonne.

Companies are pointing at increased input prices as one of the main reasons for the hike. "The hike is owing to a further increase in input costs, primarily of zinc, in the international market," said M V S Seshagiri Rao, Director, Finance, JSW Steel.

Business Standard had recently reported that price of zinc, an integral raw material used in the production of galvanised steel, had shot up by more than 85 per cent in a year - from Rs 43,605 per tonne to Rs 81,585 per tonne.

Ankit Miglani, director, Uttam Galva also said that fuel prices have gone up by about 25 per cent and logistics costs by about 30 per cent. "This has changed loading rules. Therefore, the hike doesn't mean an improvement in our margins," he said.

Other than the rise in input costs, producers also based the hike on the "buoyant demand for galvanised products."