Steel makers may raise prices of more products

After long products, steel majors are contemplating to raise the prices of cold rolled and galvanized steel used by the auto and consumer durable industries by Rs 500-1,000 a tonne.

Bhushan Steel and JSW Steel will decide on a price increase over the next week, while Uttam Galva Steels has already increased prices. Neeraj Singal, managing director, Bhushan Steel said, “We are asking for a Rs 500-1,000 a tonne hike in prices this month, but customers are reluctant.”

ON HOT PURSUIT

• There is a supply constraint in the market as some of the hot rolled producers have not resumed 100 per cent normal output
• Cold rollers are anticipating an increase in the price of hot rolled products in the wake of a proposed safeguard duty, which in turn has led traders to hoard the material

JSW Steel is contemplating price increases from the middle of the month or next month. Uttam Galva, on the other hand, has increased prices by Rs 1,000-3,000 a tonne over the past one month. The reason for the review of prices is two-fold.

There is a supply constraint in the market as some of the hot-rolled producers were yet to resume 100 per cent normal production.

Also, cold rollers are anticipating an increase in prices of hot rolled products in the wake of a proposed safeguard duty which in turn has led traders to hoard material. So much so that Uttam Galva sources said, the company was overbooked but did not have the capacity to produce any further.

However, Jayant Acharya, president (sales), JSW Steel, ruled out a hike in hot rolled prices. He said, galvanized steel prices could increase on the back of an increase in the zinc prices, one of the key inputs. Zinc prices had risen from $1,100 to $1,400 a tonne over the past one month.

Acharya said, even with the safeguard duty it would not be possible to raise prices of hot rolled products.

Anil Sureka, director-finance, Ispat Industries said, the company had not raised the hot rolled prices this month and it was too early to comment on next month’s prices.

Industry sources said extensive meetings were held on Wednesday between the steel ministry officials and, the integrated and downstream steel producers on safeguard duty.

However, the scenario in the domestic market is better than the international market. According to World Steel Association (WSA), representing about 180 steel producers, including 18 of the world’s 20 largest steel firms, India would be the only major economy whose steel consumption was expected to grow in 2009. The worldwide apparent steel use would drop 14.9 per cent while India would grow 2 per cent.