JSW Steel, a major producer of Flat Steel products has announced a price hike of INR 1,000-1,200/MT effective from February, 2014. Rising input cost is posing a challenge for the Flat Steel major.
Industry experts are still skeptical of any major revival of domestic demand for Flat products. But, lower imports of Flat products has given JSW a room to raise its prices amidst a dull demand in the economy. Industry sources believe that JSW Steel has locked their orders till 31 Mar, 2014. Moreover, it has been able to find a lucrative overseas market. JSW has more than doubled its exports to overseas markets, which has helped in better realizations.
‘Me -too’ pricing strategy
The Flat steel industry is witnessing a ‘me-too’ pricing strategy as the increase in prices by one major player triggers other manufacturers to raise prices. Last month the price hike from JSW Steel was followed by SAIL and other primary manufacturers.
This month Essar Steel is also planning to raise its prices for Flat Steel products by INR 1,000- 1,200/MT, confirms a spokesperson from Essar Steel. SAIL, too plans to raise prices of Flat Steel products by INR 750-1,200/MT, confirm a senior official of SAIL. Traders in North region also expect price hike by SAIL.
[su_quote cite=”Trader in Ludhiana”]We are expecting price hike of INR 750 – INR 1,200/MT by SAIL; inventory of SAIL products are low.[/su_quote]
JSW has raised its prices in beginning of January by INR 1,000-1,200/MT and this price hike trend still continues. As reported earlier by SteelMint, the procurement prices of Iron ore for JSW has risen between Oct’13 & Dec’13.
A comparison of Flat Steel production and Iron ore procurement prices is as shown under.
Source: SteelMint, JSW
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