)
Increasing input costs have forced steel companies, including JSW Steel, SAIL and Essar Steel, to raise prices Rs 500-1,200 a tonne for the second time this year.
JSW Steel has increased prices up to Rs 1,200 a tonne, or up to two per cent, across the board. Essar Steel has increased prices Rs 1,000-2,000 a tonne and SAIL Rs 300-500 a tonne. Others such as Jindal Steel Power Limited may follow.
The increase in global prices and rupee depreciation also led to the increase. SAIL Chairman C S Verma confirmed the rise.
“We have increased prices Rs 300-500 a tonne depending on the grade from February. It is a result of the increase in demand from sectors such as automobile, construction and white-goods sector.”
He said the worst time for the sector was over.
JSW Steel Director ( commercial and marketing) Jayant Acharya said, “We are going for a rise of Rs 700-1,200 a tonne in all products due to rising input costs from shortage of ore”.
The supply of ore has come down of late, not only from Karnataka but also from others like Odisha. Freight rates from mine to steel plant have also been rising. The costs of sourcing have risen Rs 9,000 a tonne.
JSW Steel has increased prices up to Rs 1,200 a tonne, or up to two per cent, across the board. Essar Steel has increased prices Rs 1,000-2,000 a tonne and SAIL Rs 300-500 a tonne. Others such as Jindal Steel Power Limited may follow.
The increase in global prices and rupee depreciation also led to the increase. SAIL Chairman C S Verma confirmed the rise.
“We have increased prices Rs 300-500 a tonne depending on the grade from February. It is a result of the increase in demand from sectors such as automobile, construction and white-goods sector.”
He said the worst time for the sector was over.
JSW Steel Director ( commercial and marketing) Jayant Acharya said, “We are going for a rise of Rs 700-1,200 a tonne in all products due to rising input costs from shortage of ore”.
The supply of ore has come down of late, not only from Karnataka but also from others like Odisha. Freight rates from mine to steel plant have also been rising. The costs of sourcing have risen Rs 9,000 a tonne.
In January, all major companies had increased prices after three months.
India Ratings & Research, in a recent report, said it expected domestic steel demand to improve in 2014-15 on a modest recovery in growth and an infrastructure push by the government. However, the margins would continue to be under pressure, given the high cost of production and their limited ability to pass rises in costs, as only a modest improvement in demand is expected in FY15.
The report also said that the availability of iron ore should improve in the next fiscal. But any further rupee depreciation, resulting in an increase in the landed cost of coking coal (which is mostly imported), could contract profitability margins.
