Producers Likely To Up HRC Price In May

Kolkata, April 26 | Updated: Apr 27 2004, 05:30am hrs
The producers of flat steel products may consider a hike in prices of hot rolled coils (HRC) by first week of May in view of zero or negligible stocks since March 2004 end, according to industry sources.

The increases may be in the form of premium on listed prices and the exact amount could be in the range of Rs 500-1,000 per tonne.

The government-owned Steel Authority of India Ltd (SAIL) and private sector major Tata Iron & Steel Co (Tisco) usually meet by the end of a month to decide on prices while other new players like Ispat Industries Ltd, Essar Steel Ltd, Jindal Vijaynagar Steel Ltd follow them.

Enough price cushion and sustained demand in April, usually a lean month following over-buying in March, are being considered reasons behind going for small dose of price increase.

The major players of the country did not go for any changes in HRC price from early March this year following a government advice not to hike prices before the end of the parliamentary election process. The process is scheduled to end in another three weeks.

Following the governments advisory, HRC prices ex-stockyard was benchmarked at about Rs 27,000 per tonne and steel majors followed the governments advice after a lot of hue and cry by user industry. But, at present, the landed price of imported basic grade HRC on Mumbai port is about Rs 33,000-34,000 a tonne.

Public sector steel majors like SAIL and Rashtriya Ispat Nigam Ltd have jumped the gun by hiking prices of long products in the form of charging premium to match demand-supply gap. Indian flat producers are now looking at options to pre-pone a decision on price change by effecting price increases for HRC too.

Sources in Indian Steel Alliance, a body formed by steel majors, also show the steep increase in input cost of steel making and freight charges in support of their argument. As on March 2004, the prices of coke was $500 per tonne, pig iron $350, scrap $300 and iron ore $110, which are 317 per cent, 218 per cent, 173 per cent and 293 per cent higher than the prices prevailed in December 2002. Sea freight has also gone up by 344 per cent during the period to $40 per tonne.