JSW Steels and Steel Authority of India, have raised flat steel prices by INR 3000/MT. Prices have hit two years high.
Indian steelmakers have further raised HRC prices in December by INR 3,000/MT to pass on to the consumers their escalated costs arising out of costlier raw material, both iron ore and coking coal, two crucial inputs for steel-making, even as demand remains anemic.
Steel prices zoomed in February following the imposition of the minimum import price, but the movement had been topsy-turvy since then. With the increase effected from the beginning of the current month, it would move to its highest in the current year.
Analysts, however, said that steelmakers would find it difficult to sustain the current prices for long owing to subdued demand, particularly for the long products since construction activities have slowed down since demonitisation. Around 65% of Indian steel is consumed by the construction sector.
However, cash-starved and debt-ridden domestic steel firms had to raise the prices for more reasons than one. In commensurate with other metals, international prices for steel are also on the upswing. Secondly, the prices of coking coal, which Indian steelmakers mostly rely on imports, have gone to a multi-year high exerting pressure on to the firms. Iron ore prices have also moved northwards.
The government has also recently imposed anti-dumping duty on met coke by up to USD 25.2/MT in order to rein in rising imports from China and Australia, leaving no option but to go for hiking the prices for the steelmakers.
Sources said the cost push for the domestic steelmakers, as a result of the increased raw material prices, would be in the range between INR 6,000-7,000/MT, but they refrained from passing on the entire burden fearing further decline in demand. However, if demand go up in the coming quarters, they would perhaps go for price rise once again next month.
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