Marginal correction in steel prices likely in May

After deferring a price hike last month to help the government rein in inflation, the steel companies may settle for a price correction for May.

Sajjan Jindal, vice-chairman and managing director, JSW Steel, said the company would not go for a major hike from May.

However, he added there would be some price correction to reflect the international trends and a strengthening rupee.

He said JSW would increase hot rolled coil (HRC) prices of the thinner variety by a couple of hundred rupees. The prices of the thinner varieties would also be cut by the same amount, he said.

Though none of the other companies is forthcoming, the buzz in the market is that an increase in price, if it happens, will be marginal.

The difference in prices with landed imports is to the tune of Rs 1,000 due to the strengthening of the rupee. The ruling price of HRC is Rs 27,500-Rs 28,500 per tonne.

"I don't see any scope for an increase in prices," said a steel industry source.

The steel companies were contemplating increase in prices last month but assured there would be no hike after meeting Finance Minister P Chidambaram. This came after steel producers agreed to partially roll back the Rs 700-1,200 per tonne increase in the HRC prices in March following an appeal from Union Steel Minister Ram Vilas Paswan.

The rollback was 100 per cent in case of TMT bars and galvanised corrugated products, which are items of mass consumption, and 50 per cent for HRC.

Steel prices, which were raised several times in 2006, started sliding in August, with the first cut being initiated in September. The first increase this year happened in February.

International steel experts said this would be a record boom year for the steel industry.