With increase in the prices of raw materials, prices of key commodities steel and cement in India are expected to rise in January, say industry players. Cement prices pan-India are falling due to a dip in demand. However, with freight and coal prices moving north, cement is expected to rise by Rs 5-10 per 50 kg bag this month. Steel manufacturers, meanwhile, are mulling a price hike of about 3-5% in January .
Coal prices, which are ruling at $125 per tonne, have reported a jump of 18% month on month and 45% year on year (yoy). Australian coal prices were $106 per tonne as on November 26, 2010, and $ 86 per tonne in December 2009. Similarly a 4% increase in railway freight might impact the companies margins if prices are not raised.
Vinod Juneja, MD of Binani Cement told FE , ?Cement prices will go up in January as infrastructure spend by the government will increase in the fourth quarter, resulting in more demand for cement. Also increase in the prices of coal and freight is reducing our margins. As demand for cement if expected to increase in Q4, cement prices will also to go up,? Juneja adds. All India average cement prices in October stood at Rs 230 per 50 Kg bag, up from Rs 218 per bag in September. It further rose to Rs 236 per bag in November and decreased to Rs 229 per bag in December.
Likewise, with prices of key raw material iron ore and coking coal set to increase further, steel players including Sail, Tata Steel, JSW Steel and Essar Steel
are understood to be considering a price hike by about 3-5% in January.
India’s biggest iron ore miner NMDC also said it will increase iron ore prices by about 5% in the domestic market.