After cutting steel prices in the past two months, state-run Steel Authority of India Ltd (SAIL) today said it was looking to raise the rates next month following a recovery in demand.
“We may increase steel prices in January as market is improving,” SAIL Chairman S K Roongta said.
He, however, did not give any price range of the proposed hike. The steel maker had reduced prices of its flat steel products by up to Rs 2,000 a tonne in the past two months, mainly on falling international demand.
Flat steel products are primarily used by the white goods and auto industry. SAIL had not altered the prices of its long steel products utilised by construction companies.
The company had reduced prices of flat steel products by up to Rs 500 per tonne in the first week of this month after cutting the rates by up to Rs 1,500 in the last month.
The price structure of the company generally acts as a benchmark for the domestic steel companies. SAIL offers its products in the range of Rs 29,000-40,000 a tonne.
Steel prices have globally recovered by $50 (Rs 2,335 at the present exchnage rate)a tonne to about $450 (Rs 21,017.19) a tonne after falling by $150-200 per tonne in the last two months due to fear of overcapacity in Chinese steel mills. Import of cheap steel products had been pushing pressure on the domestic steel players to maintain a low price line.
“Import of hot rolled (HR) coils has increased by 20-22 per cent and market price for this item has direct link with the imported price. Quantity may not be substantial but the import price sets the benchmark,” Roongta said.
The quantum of import of HR coils — a vital steel input for sectors like auto — could not be immediately ascertained.
Steel imports have increased by 11 per cent to 4.58 million tonnes in the April-November period of this year.
“If supply in the domestic market is more, it will naturally impact something at least,” Roongta said when asked if the current price structure would continue to hurt the margins of the domestic industry.
