Rs 4,000 per tonne hike in steel price

Among highest one-time rises

In one of the highest one-time price hikes in recent years, domestic steel manufacturers have increased the prices of hot rolled coil by up to Rs 4,000 per tonne, to around Rs 27,000 per tonne, effective this week.

Industry executives attributed this sharp rise to an increase in the prices of raw materials such as iron ore, coke and scrap, which has pushed international hot rolled coil prices to $560-570 per tonne, an all-time high. Globally, steel prices have nearly doubled from around $300 per tonne in June-July 2003.

The domestic price hike is different for different companies "" in the range of Rs 2,000-4,000 per tonne "" with Essar Steel raising prices by Rs 4,000.

"We have been compelled to increase the prices of hot rolled coils since raw material prices have gone through the roof in the past few weeks," an Essar executive said.

Tata Steel had also increased its hot rolled coil prices by Rs 2,000 per tonne, taking its ex-factory price to Rs 25,000, a company executive said.

The differential price hike by domestic companies was largely due to the brand equity they commanded and their ability to keep raw material prices down, industry sources said.

"Tata Steel's price hike has been less in recent quarters than the others because it has captive iron ore mines," an analyst said.

With scrap exports from the US falling drastically due to the levy of high export duties, China has banned the export of coke to protect its local hot rolled coil makers.

"There is a tremendous shortage of scrap and coke in the global market because of export restrictions by the US and China. This is likely to further push up hot rolled coil prices in the coming months," a steel industry analyst said.

In the last six months, global prices of iron ore have jumped from $35 per tonne to around $100, while metallurgical coke prices have increased from $80 a tonne to $430. Scrap prices have also gone up from $120 per tonne to around $330.

Industry sources said the rise in the prices of hot rolled coil would soon be reflected in the prices of cold rolled coil and galvanised products.

Stand-alone cold rolled coil manufacturers have been pressing the Union ministry of mines to ensure that hot rolled prices are not raised further.