Steelmakers increase prices by 3 per cent

Domestic steelmakers have increased prices across categories between Rs 500 and Rs 1,000 per tonne on an average or three per cent on rising input costs.

An official from a steel major said the company has raised prices by Rs 1,000 per tonne. Jayant Acharya, director (sales & marketing), JSW Steel said the company has not decided on a price rise yet but might take a decision by Saturday. Tata Steel did not comment for the story. Essar Steel said the company was reviewing the price situation. However, sources confirmed that the company has increased prices in line with the industry price hike of around three per cent.

A SAIL spokesperson said the company has not increased prices as yet. Sources within the company said the company has cut the discounts it offered on its products in the range of Rs 500-1,000 per tonne. The official touted “better market” as the reason for the rebate cut.

An analyst with a research firm said: “JSW Steel will have to increase prices as it is already suffering from iron ore shortage from Karnataka. The company is sourcing iron ore from far areas which is adding up to freight costs." Another analyst said the Supreme Court has allowed auctioning of the 25 million tonnes of iron ore in Karnataka. “This will ease the raw material issue. With 1.5 million tonnes of iron ore coming up for auction every month, the steel companies in Karnataka will be able to ramp up production.”

An official from a Mumbai-based steel company said rise in raw material prices was the sole reason for the industry move. “After the Karnataka mining ban, iron ore prices have increased. There is no other way but to increase steel prices. The demand over the last three months was low and therefore steel prices had fallen. Now, we are seeing a revival in demand and therefore we are in a position to increase the prices.”

Another analyst closely tracking the steel sector said steel companies have benefited from the fall in coking coal price.

Coking coal is a key ingredient in making steel. The analyst said: “Coking coal price for the October quarter will be around $280 per tonne down from $315 per tonne in the second quarter.” Iron ore prices globally have risen by $15 to $187 per tonne in recent weeks. Edited