Hike in steel prices likely

Domestic steel makers are planning a price hike in long steel products over the next few weeks. The price hike, if implemented, will come more than a month before the government-imposed 'steel price freeze' comes to an end in June.

The reasons for the hike are rising input costs and an extremely buoyant demand for long products.

The government had asked steel makers to fix steel prices in March to curb the rising prices. Steel companies had agreed to hold the existing price till June.

Among the long products, rebars are currently priced between Rs 25,000 and Rs 28,000 per tonne, depending on the grades and billets are priced at around Rs 23,000 per tonne. Analysts tracking the sector said that the price hike could be around Rs 1,500 per tonne.

Industry sources said, "Considering that the price of coking coal has increased considerably and the demand for long products is almost double of what is being supplied, a price hike is on the cards."

However, steel companies manufacturing long products "" Steel Authority of India, Rashtriya Ispat Nigam (RINL) and Tata Steel "" declined to officially confirm the price increase.

While SAIL manufactures around five million tonne of long products per annum, RINL produces around three million tonne per annum. Tata Steel also manufactures around one million tonne of long products per annum.

Steel dealers said, "In the last ten days, rebars and billets are being sold at substantial premium. Therefore, it is natural that the companies will look at a price increase soon."

Prices of some products have already increased, although there is no availability of these products currently, they added.