After a lull of nearly three months, steel prices are on likely to see upward movement in the new year as leading domestic producer JSW Steel has decided to increase the rates by up to Rs 1,000 per tonne (or up to 2 per cent) across the board for January.
Other leading producers including SAIL, Essar Steel, Tata Steel, Rashtriya Ispat Nigam and Jindal Steel and Power are also expected to hike their prices in the coming days due to rise in input costs, industry sources said. It, however, could not be confirmed from the respective companies.
"We have decided to increase prices by up to 2 per cent across the products. The basic reason for increase in prices is rise in input costs," JSW Steel Director Commercial and Marketing Jayant Acharya said.
"Domestically, iron ore prices have increased by 2 per cent, while scrap and HBI prices have moved up by USD 30 per tonne. Coke price has also moved up by USD 20 per tonne. We are getting affected by the increase and left is no other option but to increase the price," he said.
Since October, most of the steel companies, including JSW, had either reduced or rolled over the prices due to subdued demand as the optimism on demand push during the festive season has faded. According to official figures, steel demand has grown by by just 0.7 percent during April-November period.
However, the companies are now witnessing some demand from export-based manufacturing industries and agriculture-based demand from rural India. The companies are also looking at consolidating their exports to various markets, particularly to the US where demand has been steadily been moving upwards in last few months, Acharya said.
"There are signs of improvement but I am cautiously optimistic for the fourth quarter," he said.
January-March period is traditionally been considered a strong quarter for the Indian industries in terms of demand due to the pressure of meeting the annual targets before the end of the fiscal.
Currently ex-factory prices of long products like TMT bars and structures are hovering in the range of Rs 35,000-37,000 per tonne, while prices of flat products like HR-coil and CR-coil are at about Rs 37,500 and Rs 42,500 per tonne, respectively.
Flat steel products are used in industries like automobile and consumer durables, while long steel products like TMT bars and angles are used in the construction sector.
Even the secondary steel market, consisting of small and medium scale producers, has also seen a price rally of up to Rs 1,000 per tonne as there has been an uptick in demand across the value chain and increase in costs.
The price increase have been witnessed across various steel mandis like Mandi Gobindgarh, Durgapur, Raipur, Ludhiana, Delhi and Mumbai in last few days.
