JSW Steel hikes prices by up to Rs 750/tn; others may follow

JSW Steel has increased prices of its products by up to Rs 750 per tonne, or about 1 per cent, across the board for March, its third hike in three months.
Other producers such as SAIL, Essar Steel, Rashtriya Ispat Nigam and Jindal Steel and Power are also expected to hike prices in the coming days due to rise in input costs, increasing international rates of steel and demand uptick in the current quarter, industry sources said.
However, it could not be confirmed from the respective companies.
"We have roughly increased the prices of long products in the range of Rs 500-750 per tonne for March. For flat products, the increase is Rs 500 per tonne," JSW Steel Director (Commercial and Marketing) Jayant Acharya told PTI.

Despite three consecutive price hikes in 3 months, we are still Rs 3,500 per tonne behind the price of April 2012 for long products while prices of flat products have now come to the level of April 2012, he added.
"So prices are still lagging behind while the input costs have increased tremendously. On the cost side, if you see, price of iron ore sold through e-auction has increased. Coal prices have decreased to some extent but its benefit could not reach us due to exchange rate fluctuations," Acharya said.

Indicating better times in the coming months, he said there has been a surge in demand in last few months and automobile and construction sectors have shown some growth.

The trend is expected to continue for the time being due to Interim Budget announcements of across the board duty reductions for the automobiles and capital goods sector. This in turn will lead to rise in steel demand, he said.
However, the company has not raised the price of its long term contracts and accordingly, there has not been any changes in quarterly prices, Acharya clarified.
For the last two months, most of the steel producers, including JSW Steel, had increased prices expecting demand surge during the last quarter of the fiscal, considered as the strongest quarter as companies rush to meet their annual targets.

The input costs, largely due to rise in iron ore prices and logistics rates, have also led to increase in steel prices. The steel manufacturers are also hoping a surge in demand due to the upcoming general elections.
At present, ex-factory prices of long products like TMT bars and structures are hovering in the range of Rs 37,000-39,000 per tonne, while prices of flat products like HR-coil and CR-coil are at about Rs 39,500 and Rs 43,500 per tonne, respectively.
Flat steel products are used in industries like automobiles and consumer durables, while long steel products like TMT bars and angles are used in the construction sector.

JSW operates a 10 million tonnes plant in Karnataka's Vijayanagar (running at about 80 per cent capacity) and a 3 MT plant in Dolvi, near Mumbai. It is the second largest domestic manufacturer after state-owned SAIL.