Alloy steel makers set to ramp up prices by 5%

Leading alloy steel manufacturers, such as Mukand, Mahindra Eugene Steel, Sunflag, Kalyani Steels, Usha Martin, Aarti Steel, Vardhaman Steel and Modern Steel, are planning to increase alloy steel prices by 3-5 per cent over the next few months, senior officials in Alloy Steel Producers Association (ASPA) said.

ASPA has 19 members who account more than 90 per cent of the alloy steel produced in the country.

The hike would make the commodity dearer by Rs 1,000-3,000 per tonne. Currently, alloy steel is priced at Rs 30,000 per tonne, for the low grade variety, and Rs 60,000 for the high grade steel.

Alloy steel is used in the automotive and the general engineering sectors. "The demand for alloy steel will be proportional to the growth in the global automotive industry. Of late, the demand has been good as domestic auto component suppliers are increasingly going global and supplying quality products to auto makers globally," said Rajesh Shah, managing director, Mukand.

With the advent of the festive season in October, the demand for cars refrigerators, washing machines, etc is expected to grow. Consequently, the alloy industry that caters to the automotive sector will also receive an impetus for renewed growth.

The automobile industry is growing at 15 per cent annually and the auto component segment is doing even better with an annual growth rate of 20 per cent.Alloy steel recorded a growth of over 10 per cent to 2.12 million tonne in 2004-05 as against 1.88 million tonne during in the previous corresponding period.

"The prices would be hiked to counter the upward movement in prices of raw materials such as melting scrap, iron ore and other inputs also. The price hike would vary from region to region," said Aspa officials.

Iron ore and melting scrap are some of the key raw materials used in the manufacture of alloy steel. Over the last three months, prices of melting scrap have risen to $290 per tonne as against $260 per tonne, three months ago. The iron ore prices have doubled to $60 per tonne compared with $30, a couple of years back.

BULLISH TIMES

Alloy steel low grade, now priced at Rs 30,000 per tonne, would become dearer by Rs 1,000-Rs 3,000

Domestic auto parts suppliers rising global presence has resulted in an increase in demand

Festive season demand for consumer durables is also expected to boost alloy steel industry

Alloy steel output had recorded a growth of over 10 per cent to 2.12 mt in 2004-005