Flat steel producers raise price by Rs 500/tonne

Buoyed by an increased demand from automobile and consumer durables sectors, flat steel makers have raised the price by up to Rs 500 a tonne to offset rising input costs, industry sources said.
"The hike by up to Rs 500 per tonne has been effected from today. This is mainly to partially offset the rising costs of input like domestic iron ore and diesel," an industry source said.
Another source said the price of long products, used in construction, was not hiked by the steel makers as demand for such products are yet to pick up.
The price of base-grade of hot rolled products is now hovering between Rs 37,000 and Rs 37,500 a tonne.

After a prolonged slump, auto sales have been on the rise since July and auto-makers are hopeful of a better demand leading up to the ensuing festival season. Similarly, consumer durables sector is also doing better in recent times.
Signalling weak market condition, steel consumption in the country in the first four months of the current financial year grew by just 0.6 per cent to 25.72 million tonnes.

Incidentally, in the entire last fiscal consumption grew by the same rate only.
The little uptick in demand for flat products does not reflect the overall picture of the steel makers as around 70 per cent of the total consumption of steel in the country are from the construction sector.

"Hence, until and unless demand for steel picks up from the construction sector, steel industry would not be in a good shape. However, that is also not too far, hopefully," a source said.