Steel cos mulling price hike on firm global cues

Domestic steel giants like JSW Steel and Jindal Steel and Power (JSPL) are considering increasing prices of their products following the firming global cues and the improvement in domestic demand.     

Steel behemoth Tata Steel and state-run RINL have already hiked steel prices by up to Rs 1,000 a tonne.     

JSW Steel, the country's largest private steel maker, had unveiled its intentions to hike steel prices in the July- September quarter following the increase in demand for the commodity from sectors including construction and automobile, apart from positive global trend which would cushion its move.     

Sajjan Jindal, JSW Steel Vice-Chairman and MD, maintained that the steel prices have already bottomed out and now is the time to revise the rates upwards, though marginally.     

"We are looking to increase prices of our products by 2 per cent in July quarter on account of improvement in demand in the domestic market and the rise in steel prices globally, of late," he said.     

Pre-empting more such moves by its peers in the domestic market, Jindal said, "Right now there is an upswing in the international market so there is a slight improvement in the steel prices. Its impact will be felt in India."     

Backing JSW Steel's view, another domestic steel maker JSPL said there is a case for nominal price increase in India following firming global cues. "We cannot be isolated from the international price trend. But I do not expect a major increase in prices," JSPL Executive Vice-Chairman and MD Naveen Jindal said.     

Tata Steel has already increased the prices in the range of Rs 300 and Rs 500 for the products to be sold in the spot market, RINL has upped the rates by up to Rs 1,000 a tonne.     

Even as many steel companies are working to hike rates of their products, state-run behemoth SAIL has adopted a cautious approach and says its in "no hurry to increase prices."     

"There is no major uptrend in the international prices. Let us watch the global trend, what happens... There is no hurry to increase prices," SAIL Chairman S K Roongta said.     

However, the steel major has discontinued the Rs 500-a -tonne discount it was giving its retailers to firm up the offtakes amid the gloom.     

There are many like Essar Steel who think price hike at the moment is wishful after a period of lull but the threat of cheap imports have forced them to think otherwise.     

The domestic steel firms saw the prices and demand for their products crashing due to the global economic crisis. The gloom took a toll on their bottomlines as well.     

However, the industry is now bullish on an improved economic scenario with the government working to stimulate the system with its renewed focus on boosting the infrastructure space and creating demand across all the sectors.