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Leading steel producer JSW Steel has increased prices by up to Rs 1,200 per tonne, or up to 2%, across the board for February, its second hike in a month.
Other producers such as SAIL, Essar Steel, Rashtriya Ispat Nigam and Jindal Steel and Power are also expected to hike prices in the coming days due to rise in input costs and increasing international rates of steel, industry sources said.
It, however, could not be confirmed from the respective companies.
"We are doing it for across the product lines, the increase is 1-2% or Rs 700-1,200 per tonne. This is due to combination of factors but the main reason is rising cost on sourcing iron ore," JSW Steel Director Commercial and Marketing Jayant Acharya told PTI.
He further said that supplies of ore have shrunk in recent times, not only from Karnataka market but also in other markets like Odisha due to non-availability. Besides, prices of state-owned NMDC and private producers differ considerably.
Freight rates for carrying the ore from mine to steel plant have also been rising in recent times and together with low quality ore available in Karnataka market, the costs on sourcing iron ore have risen by about Rs 9,000 per tonne, he said while talking about the rationale of the price hike.
Rupee depreciation and price differential between international and domestic rates of steel products were also the factors behind the increase, Acharya said.
Early this month, JSW Steel and some other steel producers had increased prices. The then hike was done after a gap of nearly 3 months as demand was subdued and optimism on demand push was fading.
The companies are now hopeful of surge in demand from export-based manufacturing industries and automobile sector, which is expected to grow due to upcoming general elections.
For Indian steel companies, the January-March period is traditionally a strong quarter in terms of demand as its clients are under pressure to meet their annual targets.
Currently ex-factory prices of long products like TMT bars and structures are hovering in the range of Rs 36,000-38,000 per tonne, while prices of flat products like HR-coil and CR-coil are at about Rs 38,500 and Rs 43,000 per tonne, respectively.
Flat steel products are used in industries like automobile and consumer durables, while long steel products like TMT bars and angles are used in the construction sector.
JSW operates a 10 million tonnes plant in Karnataka's Vijayanagar (running at about 80% capacity) and a 3 MT plant in Dolvi, near Mumbai. The company is slated to announce its third quarter results tomorrow.
