Indian steel firms to hike prices in New Year

News was prepared under the information support of Online Daily Newspaper on Hellenic and international Shipping "Hellenic Shipping News".

31 Dec 2009

India’s SAIL, Essar and Ispat, all steel majors, are all set to hike prices by 3-4% or Rs 1,000-1,500 per tonne in January in line with rising global prices. In November, international steel prices had gone up over 5% following a rise in demand. The price hike, which will be for steel products (both long and flat) sold in the spot market, will increase the cost of production for steel-consuming sectors such as automobiles, consumer durables and construction.
Steel products are currently at Rs 32,000-34,000 per tonne in the domestic market, marginally higher than the landed price of imported steel.
Steel prices have risen $30-40 per tonne to $580 a tonne internationally in the past month, which is a clear indication of steel uptake. Also, demand for long steel products, which was subdued during the monsoon, is on the rise and leading to price increase.
India’s largest steel producer SAIL plans to hike long product prices by Rs 1,000-1,200 per tonne and flat steel products by Rs 700-1,000 a tonne. This would be the second round of hike by SAIL in as many months. SAIL and Tata Steel hiked prices of long and flat steel products by up to Rs 2,000 per tonne a few days ago on the back of rising demand.
Ispat, which only produces flat steel products, will increase prices by Rs 1,000-1,500 a tonne depending on the grade.
In October and November, domestic prices came down as rates in China, the leading producer and consumer of steel, crashed to $450-500 per tonne even as prices in other major international markets stabilised. Anticipating growth in demand, Chinese steelmakers had hiked production levels significantly in August which led to oversupply.
The revival in demand since then has absorbed the fresh steel stocks and China is witnessing a moderate rise in prices.

Source: Commodity Online