A fresh round of price hike is imminent from the country?s major integrated steel producers like SAIL, JSW Steel and Tata Steel within a week?s time for both long and flat products. The expected hike would be primarily driven by an increase in input costs, a jump in international prices, which have gone up by almost $100 a tonne and a surge in demand.
Most steel makers in the country are bracing to hike prices starting next month. Global steel prices have shot up by almost Rs 5,000 per tonne in the last one and half months. The input cost have also gone up significantly during the same period with the prices of iron ore and coking coal rising over 20% and expected to shoot up further. The prices of flat products are likely to rise by Rs 2,500 a tonne roughly. Prices of long products, which is basicaly used in construction, is also likely to surge as the spot prices have been witnessing an upward trend.
Steel makers hiked prices to the tune of Rs 2,000 to Rs 2,500 per tonne in February, followed by Rs 600 a tonne earlier this month following roll back in excise duty by two percentage points in the Budget. Seshagiri Rao, joint MD and group CFO of JSW Steel, recently told a news agency, ?Cost pressures are very strong at the moment. Prices are not affordable… in the short-term we have to pass through this cycle.?
A fortnight back, BHP Billiton and Japan?s JFE Holdings, value-added and speciality steel product manufacturer, entered into a quarterly agreement in which the former would supply the latter coking coal for three months at $200 a tonne, a 55 % increase over last year?s rate of $129.
For coking coal, BHP Billiton and Rio Tinto are among the leading global raw material suppliers that are pitching for quarterly contracts to replace the 40-year old annual benchmark pricing system.