)
Domestic primary steel producers have taken a rather mixed stance with regard to steel product price revision for April despite an appreciation in the rupee which should ideally trigger only a cut in prices.
While JSW Steel and Essar Steel have chosen to slash prices of select products, Tata Steel has decided to up prices for rebars. State-owned Steel Authority of India, on the other hand has simply rolled over the prices of all its products.
"Considering the international steel prices and the appreciation of the Indian rupee, the company has adjusted domestic prices downward to align it with the landed cost of import.," Jayant Acharya, Director (commercial and marketing) of JSW Steel told Business Standard today. "Prices of hot rolled coils will be slashed by about 500-750 rupees per tonne effective from April 1, while that of wire rods is being reduced by 500 rupees," he said.
An appreciation of rupee affects mainly the commodity grade steel products and not the value added products. Due to this, the reduction is in select products this month, said an industry source. Prices of the remaining products, mostly value added, will be rolled over, he added.
An appreciation of rupee hints at a product price cut as it brings down the import bill of coking coal which is one of the key raw materials used in the making of steel.
"Essar Steel has also decided to marginally lower prices of only some products and rollover prices of its other products," said a company source close to the development. "The company has revised prices for both OEMs (original equipment manufacturers) as well as retail segment effective from April 1," he added.
At Delhi-based Jindal Steel and Power, the decision is still awaited, while Rashtriya Ispat Nigam was not reachable for an update.
Steel producers have been raising product prices for the past three months, citing rising input costs. In February, they justified their stance by saying the price levels after revision were the same as in 2012.
"The demand too is not strong in the domestic market," said Giriraj Daga, analyst with Nirmal Bang brokerage. "This is also another factor that must have prompted steel companies to slash prices for April," he said.
"Our (SAIL) price revisions are usually marginal and so we do not feel the need to cut prices for April. Last time, we had increased prices only by 500 rupees or so, which was not much," said an official from SAIL on conditions of anonymity.
Tata Steel has raised prices of rebars sold under the brand name TISCON. "Only prices of rebars under TISCON have been hiked for the quarterly contract starting April, prices of rest of the products will be rolled over," said a source close to the development.
