Mumbai, Oct 21: Ispat Industries, flagship of the ML Mittal group, has decided to hike prices of hot-rolled coils (HRC) by around Rs 500-700 a tonne with effect from November. The increased prices will be over and above a similar price hike effected from October.Explaining the rationale behind the move, senior vice-president (marketing) Barin Das said: "Over the last few months international HRC prices have jumped around $60-70 a tonne. In comparison, domestic have been raised by only $10-12 a tonne."Ispat's ex-factory prices will move up from around Rs 13,800 a tonne to around the Rs 15,000 per tonne levels with the price revision. The company is producing around 75,000-80,000 tonnes a month at present, and the price hike is expected to improve its margins in the second half.Other steel companies said that they were reviewing their pricing strategies. "The rise in domestic price last month is not in proportion to the steeper jump in international prices. This leaves room for another round of price hikes," said a senior industry official. Another marketing official at a leading steel company said: "The cause for concern remains whether the user industries can absorb another price hike. But with international prices also on the rise, imports through normal route will be prohibitive.
"According to Das, "Most of the steel companies have stepped up their exports over the last couple of months. Whatever excess supply there was in the domestic market is being shipped outside as a result. Realisations in the export market has also improved in recent weeks."Industry sources pointed out that the European markets have become attractive with investigations into dumping by Indian companies having been withdrawn. Besides, the US has banned imports from Japan and Russia, opening up yet another large market.
Both Tata Steel and SAIL have been exporting over 30,000 tonnes a month, and the figure is expected to go up if international prices become even more attractive.
Copyright © 1999 Indian Express Newspapers (Bombay) Ltd.