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The rise is partly due to a rise in costs and better domestic and international markets. Currently, the price of hot rolled coil, the flat steel benchmark, is Rs 33,000 a tonne.
“Steel prices increased in the beginning of January, on prospects of new demand, despite easing met coke prices. Steel demand in the country is expected to improve in the fourth quarter, owing to increased construction activity, as project-completion would be expedited before the end of the financial year. Also, with steel prices increasing internationally in the wake of an upward movement in iron ore prices and promising demand, domestic steel companies are likely to pass on the increased costs to end customers in a phased manner in the last quarter,” said a Capitaline report.
In August 2012, prices were raised by Rs 500 a tonne. The lull in the third quarter was due to slow growth in the automobile and construction sectors.
“Cumulative production data for April-December 2012 shows production growth of only 2.16 per cent over the corresponding period last year. The industry produced 16,97,625 vehicles in December 2012, against 16,77,588 in December 2011, with marginal growth of 1.19 per cent, indicating a slowdown. On the other hand, the Index of Industrial Production recorded growth of 8.2 per cent in October year-on-year, compared to a decline of five per cent in the year-ago period. This is due to growth in the manufacturing and mining sectors of 9.6 per cent and 5.5 per cent, respectively, in October 2012, compared to 2011. This implies a pick-up in economic conditions,” said the Capitaline report.
However, demand conditions now appear to have improved, with construction showing signs of a revival. Last week, prices of long products, used in the construction sector, were raised about Rs 500 a tonne.
