 "Steel companies plan to increase prices")
In view of rising production costs, steel companies such as Essar Steel, JSW Steel, Tata Steel and the Steel Authority of India are planing to increase prices by Rs 2,500 a tonne from September 1.
The price hike is expected to push the rate of hot-rolled steel to Rs 39,000 a tonne and that of cold-rolled to Rs 42,000.
According to industry insiders, the cost of steel production has risen Rs 5,000 a tonne in the past eight months and the industry has been left with no option but to increase prices.
The cost of iron ore, an important ingredient in steel production, has shot up to $61 from $40-42 per tonne in January this year.
Since January, the price of coking coal has touched $127 from $75 a tonne, and that of zinc, another raw material for steel, increased 50 per cent to $2,215 a tonne. The price hike has come even as the central government has decided to protect the domestic steel industry from the import of cheap steel, mainly from China, through a slew of measures.
Minimum import price is a threshold below which the industry cannot import steel. It was imposed in February this year on 173 item lines, for a period of six months. This was extended for two months on August 5, but the very list of products was pruned to 66.
Domestic steel majors JSW, Essar Steel and Tate steel had pitched for extension of this barrier for a further six months to curb cheap imports.
However, the Engineering Export Promotion Council opposed the move citing the difficulties being faced by user industries.
Earlier this month, the central government imposed anti-dumping duty for six months on import of hot-rolled steel products from six nations, including China and South Korea, to protect domestic manufacturers.
Rating agency Icra expects the imposition of provisional anti-dumping duty on hot-rolled and cold-rolled coils for six months will help domestic flat steel players overcome the challenges posed by a weak domestic demand.
