Steel makers may raise prices by Rs 500-1,000/tn next month
Burdened with higher input costs, domestic steel makers are mulling increasing the price of the alloy next month
“We have been holding the prices for the last couple of months though input costs were going northward. There will be no holding of the price this time. We will raise prices by Rs 500-1,000 per tonne from August,” industry sources said.
Prices could go up for both long and flat products. Long products are used in construction sector while flat products find application in white goods and automobile sectors.
During the last two months, the input costs used by steel makers have gone up by around Rs 1,600 per tonne with the rise in almost all inputs such as iron ore, diesel, zinc and coking coal, they said, adding, rail freight has also put pressure.
“The price of iron ore and diesel have gone up. The rise in costs of coking coal and zinc is because of the duty hike in the Budget. Rail freight was also raised. All these have escalated pressure on us,” a leading steel maker said.
Essar Steel also admitted that the cost of inputs have gone up exponentially, but a company spokesperson declined to share the likely price hike to be effected from August.
Surprising the steel industry, government levied 2.5 per cent duty on imports of coking coal, a key steel making input, in the Budget from nil earlier. It requires 0.8 tonnes coking coal to produce one tonne of steel.
Roughly estimated, the duty hike would lead to a Rs 200 per tonne increase in the cost of steel production, a leading steel maker had said earlier.
Indian steel makers have been holding the prices for last couple of months and now, it will be forced to partly pass on the escalated price on to the customers, another official from a major steel firm said.
“The domestic steel is still cheaper by about Rs 750-1000 tonne. This offers them a cushion to increase domestic prices,” he said.