In a move that will impact a slew of sectors, integrated steel producers like Steel Authority of India Ltd, Tata Steel, JSW, Essar Steel and Ispat Industries are likely to hike their prices next month to offset the rising prices of key raw materials like iron ore and coking coal.
Industry sources said these companies would take a final decision on the price hike by the end of the week. The sources said the hike in the price of hot-rolled (HR) coils?the base product?would be
Rs 800-1,000 a tonne. At present, HR coils are priced in the domestic market at Rs 28,000-29,000 a tonne. Globally, HR coil prices rule in the region of $650 a tonne.
Sources said the 15-20% hike in the price of iron ore and coking coal mandates an upward revision in steel prices. While iron ore prices are at around $150 a tonne, coking coal is at around $135 a tonne. For both raw materials, most domestic steel companies depend on imports. With steel production rising, the supply of these raw materials has tightened considerably in recent months.
Between January and December this year, steel companies hiked prices thrice, with the last revision in October, when prices were increased by around Rs 500 a tonne.
An increase in steel prices will impact a wide range of industries, from automobiles to white goods. Automobile companies have already announced that they would be increasing the sticker price on passenger cars from January due to rising input costs. However, a price hike is not expected in long products, which are mostly used in the construction sector, since prices are already ruling high here.
Though the government does not usually interfere in such price revisions, the steel ministry constituted a committee earlier this year under a joint secretary with industry members to monitor the price situation.
Industry sources said that since no prior permission from the government is required to raise prices, they do not apprehend any problem.
