| Visakhapatam Steel Plant faces significant rise in input costs
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| The state-owned Visakhapatnam Steel Plant (VSP) will have no hesitatation in effecting another hike in product prices if necessary, despite the steel ministry’s plea not to hike the steel prices for some time. This is the refrain of the sources closely monitoring the steel plant’s input costs and market prices.
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| It may be noted that after constant requests from major steel consumers in the country, recently the steel ministry has advised the government undertakings Steel Authority of India Limited (SAIL) and Visakhapatnam Steel Plant (VSP) not to hike the steel prices further for some time.
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| VSP increased its products prices by Rs 3000-4000 per tonne during the last seven months. The management was actually contemplating further price hike in view of the growing demand.
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| “We have increased the steel prices several times during this fiscal. This was not only due to demand for steel in the domestic market, but also to significant rise in our production costs . We do not have any alternative but to increase the prices,” a senior official of VSP, told Business Standard.
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| For the last eight months the import material costs and freight rates had been continuously rising. In the month of April, VSP paid a freight rate of $ 11.45 for import of one tonne coking coal from Australia, but now this freight rate has gone up to $ 29.
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| Similarly, metallurgical coke freight rates also went up from $ 14.5 to $ 32, and lime stone freight rates jumped from $ 7.5 to $ 15.75, the sources in Vizag Steel, informed.
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| VSP has been importing more than 30 lakh tonnes of coking coal, nearly two lakh tonnes of metallurgical coke and 4.5 lakh tonnes of lime stone per annum. Metallurgical coke import prices increased by 10 per cent during the last six months. Similarly, other imported material prices to rose by 5-10 per cent.
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| “ If production expenses are increasing, how can we reduce the prices. So in future also, we may increase our product prices in line with our production costs,” the sources maintained. |
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