Monnet, Jindal may hike prices

Coal-based steel producers, including Monnet Ispat and Jindal Steel, are likely to raise prices by Rs 1,000 a tonne very soon following a similar increase by gas-based steelmakers.

The government's decision to levy an export duty of Rs 300 a tonne on iron ore has led to a rise in prices of the raw material in the domestic market too. This has left steel producers with no option but to raise steel prices to maintain their profits.

On March 2, the price of HR coil was raised by Rs 1,000 a tonne after a Rs 500 a tonne rise in February. The price of HR coil had touched Rs 32,300 a tonne, a rise of 30 per cent in a year. Similarly, the price of rounds had also shot up to Rs 27,500 a tonne from Rs 24,500 a tonne in five months. But, the 50 per price hike was rolled back following the government's intervention to check inflation.

"That was a temporary phenomenon and everything has been smoothened now. This is perhaps the best time for the steel industry and it is expected to continue till the next monsoon," an industry expert said. Apart from iron ore, the government levied Rs 2,000 a tonne export duty on chrome ore. A 5 per cent duty on coking coal imports was abolished in the last Budget.

In the Mandi Gobindgarh market, spot prices of steel have increased by Rs 500-1,000 a tonne in the last one month despite the government's efforts to roll back the price hike by major producers. Hot-rolled coil (HRC) is currently quoted at Rs 31,200 a tonne, while hot-rolled sheet (HRS) is sold in the range of Rs 31,500-31,900 a tonne. Cold-rolled coil (CRC) and cold-rolled sheet (CRS) are sold at Rs 35,900 and Rs 35,800 a tonne, respectively.

Experts believe the input costs are going up substantially, with ingot prices shooting up to Rs 24,350 per tonne from Rs 23,000 a tonne a month ago. Long steel prices have also surged in a similar way, with TMT bar quoting at Rs 26,500 a tonne.

"Steel prices may remain stagnant in the next fortnight due to financial closing in India," said Anil Suraj, a trader in Mandi Gobindgarh.

"The price rise in any commodity is purely based on demand and steel is no exception. The rising steel demand for infrastructure development in the country is driving prices, including those of scrap, sponge iron and iron ore," an analyst added.

The prices of sponge iron have increased by 9 per cent or Rs 1,000 in the last one month to Rs 12,700-13,000 a tonne for the coal-based industry and Rs 14,250- 14,500 a tonne for the gas-based industry. Melting scrap, another major raw material for steelmaking, has also turned expensive because of its shortage and it is currently imported at $400 a tonne. Coking coal, too, has gone up to $175 a tonne.