JSW, Essar Steel hike flat product rates to offset input costs

Two leading steel makers, JSW and Essar Steel, have hiked rates for flat products by up to Rs 1,000 per tonne in the wake of rising raw material costs.

However, state-run SAIL has kept prices at last month's levels, while Tata Steel is yet to decide on any move.

"Our prices for flat products have gone up by Rs 600 to Rs 1,000 per tonne since the beginning of the month, the first such move in the current fiscal," officials at both JSW and Essar Steel said on condition of anonymity.

Following the increase, the price of HR-coil, a flat product used in the automobile and white goods sectors, is between Rs 36,000 and Rs 36,500 per tonne, which could lead to margin pressure for user sectors.

"On the back of rising input costs and strengthening of international prices over the last couple of weeks, there is a case for upward revision of steel prices," an Essar Steel spokesperson said, while declining to confirm or deny the price hike.

The price of coking coal and iron ore, the two most important raw materials for steel-making, have shot up to $330 a tonne and $180 per tonne, respectively, in recent times.

While the rise in coking coal prices is attributed to the floods in Australia, which contributes around 80% of India's imports, the spurt in iron ore prices is mainly due to increased global demand.

SAIL, the country's largest steel-maker, however, refrained from effecting any hike as it believes that the cost of raw material will now stabilise, as they have already reached their peaks.

"We have rolled over the prices from May to June as we do foresee that raw material prices are now stabilising," SAIL Chairman CS Verma said.

He added that "mining in Australia is coming back to normal, so prices of coking coal should come down now."

The SAIL Chairman, however, refused to give any range for the coking coal prices at which the steel-maker will be comfortable.

A price hike for long steel products, mainly used for the construction sector, is not in the offing as rains have already started in some parts of the country, industry sources said.