Global hot rolled coil (HRC) prices have touched the $600-mark as compared to $570 per tonne five days back, putting the domestic steel makers in a tight spot as they have assured the steel ministry that they would refrain from price hikes in domestic markets till June. | |
| Industry sources said, FOB prices for HRC from the US and Russia were around $545 and the landed cost was working out to be around $600 per tonne. Prices in China however, were a shade below the magic figure of $600 per tonne. |
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| The main reason behind the hike was the spiralling cost of raw material and logistics. Over the past month, ferrous scrap prices increased from $260 to $325 and pig iron from $260 to $340. Metallurgical coke prices increased from $275 to $350. |
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| "Raw material prices in the international market were increasing on a weekly basis" said industry sources. |
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| If the prices of input materials were considered from last year, then the increase in prices would appear to be even more dramatic. |
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| Scrap prices have increased 124 per cent since July last year, pig iron by 119 per cent and metallurgical coke by a whopping 141 per cent. |
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| While global prices were soaring, the steel ministry was trying its best to keep domestic prices firm. J P Singh, joint secretary (steel) said that steel makers had assured the government that prices would be kept at Rs 27,000 per tonne, for the quarter. |
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| Singh said, even after the recent round of price hike, prices were at Rs 27,000 per tonne. Moreover, the ministry was also trying to curb exports so that steel makers met domestic demands first. |
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| Resultantly, the message to curb exports had already been passed on to the steel companies in clear terms. |
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| The industry was also anticipating a freeze in duty entitlement passbook (DEPB) benefits from the commerce ministry. |
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| The steel ministry decided to intervene after the user industry raised a hue and cry over successive price hikes and shortage of steel in the home market. |
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| Steel industry representatives argued, in 2003 the industry supplied 1.2 million more steel in the domestic market as opposed to the previous year. |
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