Steel Mint has heard from the market sources that large Indian steel makers are most likely to increase the prices of long product by INR 1,000-1,500/MT for Dec’16 deliveries.
Currently, rebar offers by large steel producers are in the range of INR 35,000-35,500/MT (including excise duty, CST, VAT extra) for Punjab region.
The prime reason behind the sharp increase in steel prices is because of sudden increase in coking coal prices for the last few months in the international market.
Almost large Steel makers like SAIL, RINL, Tata steel, JSW steel and JSPL are largely relying on imported coking coal.
On a monthly average basis, Australia premium coking coal prices which was at USD 118/MT during Aug’16 is now reached to USD 308/MT in Nov’16, now it has increased by USD 190/MT.
As per the market participants, the cost of steel production is certainly going to rise in the range of INR 4,000-5,000/MT of all large steel producers and they are planning to pass the same cost to their consumers partially.
On the demand side, domestic steel producers are facing extreme sales pressure especially after the government move for demonetization.
A well know dealer based in North India also shared that,” As it is heard that SAIL may announce increase of long product prices by INR 1,000-1,500/MT in early Dec’16″.
Note: Prices are basic & consider to be large steel producers like SAIL, RINL, Tata Steel
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