Input costs rising, explain manufacturers; rise may be less than the latest one.
With January witnessing four-five per cent increase in steel prices and raw material prices continuing to rise, steel makers are contemplating another round of price rise this month.
Nittin Johari, director (finance), Bhushan Steel, when asked when this might happen, said: “Any time...I don’t think we will wait for February.” He said they were looking to raise prices by Rs 1,000 a tonne, slightly less than three per cent.
Jayant Acharya, director (sales and marketing), JSW Steel, said, “There is a case for a further price hike but we haven’t decided on the time as yet.” He said long steel (used in infrastructure and construction; flat steel is used in automobiles and white goods) was mostly sold in the spot market and prices for these had an upward bias. Ankit Miglani, director (commercial), Uttam Galva, a leading autograde steel maker said, “Yes, there will be a hike in February. Although, it will be lesser than the earlier hike of Rs 2,500-3,000 a tonne.”
| GAINING STRENGTH | ||
| Commodity | Price Rs /tonne | |
| Post Jan rise | Before Jan rise | |
| Ingot | 34,000 | 29,000 |
| Billet | 35,000 | 30,000 |
| HRCoil | 36,200 | 31,200 |
| CRCoil | 38,600 | 33,600 |
| HRSheet | 38,000 | 33,000 |
| CRSheet | 37,600 | 32,000 |
| Scrap | 27,500 | 22,500 |
| TMT | 37,200 | 32,200 |
Steel Authority of India (SAIL), India’s largest maker, told Business Standard the next rise depends on market conditions and raw material prices. Its spokesperson said raw materials, especially coking coal prices, were on the upswing.
Anil Suraj, an analyst based in Mandi Gobindgarh, India’s largest steel sale market yard, said, “Prices have risen by Rs 5,000 a tonne since the last week of December. Post-monsoon construction activities started with over a month’s lag. Since prices of raw materials like iron ore, shredded scrap and coking coal have been continuously rising for nearly two months, with prospects of rising further in the wake of supply disruption from Australia, prices are set to rise further in the weeks ahead.”
Analysts believe the flood situation in Australia’s Queensland will worsen coking coal prices, already touching $225 a tonne for the current quarter and expected to breach $250 a tonne in contract prices for the coming quarters. The spot prices of coking coal have already touched $250 a tonne. Prasad Baji of Edelweiss said, “There is ground for a steel price hike, as after a long time we are seeing a situation that Indian prices are at a discount to the international ones.”
Baji said long steel prices have in fact gone up by more than that of flat steel and there might be a case that steel makers may increase prices in January itself. He said, “In December, steel makers had raised prices in the middle of the month, so we don’t see why they will wait for February to raise prices. They might increase in the third or fourth week of January.”
Last week, SAIL had raised prices by Rs 1,000 a tonne on flat steel and Rs 1,200 a tonne on long steel. JSW Steel had raised prices by four-five per cent across its range of steel products. Uttam Glava, too, had raised prices and Bhushan Steel raised prices by Rs 1,500 a tonne in two tranches, first by Rs 500 a tonne, followed by Rs 1000 a tonne.
