Steel majors ramp up prices

Steel companies have increased prices by Rs 500 a tonne, the first increase since prices softened by July.

The price increase in hot-rolled coils is already in effect. Sources said the price increase was in line with the international trend, though the increase was conservative compared with global prices.

Prices overseas has increased by $35-$50 a tonne in the 4-5 weeks and another upside was expected by the end of the month. Sources expect an increase of $20-$30 a tonne in the international market this month.

The upward movement in steel prices was likely to continue through the summer months with the pickup in construction activity. Prices in the domestic market started softening from July. However the last quarter, prices remained unchanged, which was reflected in the performance of steel companies.

Steel Authority of India Ltd's (SAIL's) net profit was higher by 124 per cent at Rs 1,471 crore. Tata Steel's net profit increased 41 per cent to Rs 1,064 crore, JSW Steel 160 per cent to Rs 362.1 crore, Essar Steel recorded a 30 per cent increase to Rs 179.5 crore and Ispat Industries posted a net profit of Rs 17.5 crore compared with a net loss in the same period last year.

Sources said the industry though could have increased prices much more this month, chose to take small steps. The ministry of steel had constituted a steel price monitoring committee (SPMC) with members from the user industry and top management of producers apart from ministry representatives.

The terms of reference of the committee includes formulation of strategy regarding future price, based on an adaptive model, which was feared to tantamount to regulation under a different garb.

The ministry had also decided to maintain a database of producers' prices with the Joint Plant Committee (JPC) compiling figures. The prices would be stockyard prices and was likely to be provided on a fortnightly basis on the 1st and 15th of every month.