India’s steel makers will not raise prices despite rising input costs after a three-month “freeze” on steel prices that ends this week.
“We are not going to increase prices, at least in this month,” Sajjan Jindal, vice-chairman and managing director of India’s third largest steel maker JSW Steel Ltd said on the sidelines of a Mumbai conference.
A spokesperson for Tata Steel Ltd, the country’s largest private-sector manufacturer, said his was not "raising spot prices.” Essar Steel also said it was maintaining "status quo on prices.” An Ispat Industries Ltd spokesperson also gave a similar reply.
State-owned Steel Authority of India Ltd could not be immediately reached for comments.
Steel sells in India at about 30 per cent or $300-$350 a tonne below global prices, as companies have not been able to pass on the increase in costs of key inputs such as iron ore and coking coal to customers.
The country's steel companies had agreed in May to hold prices for three months to help the government battle rising inflation.
Analysts, however, say prices have seen an increase on contracts private steel makers signed directly with clients. This, they say, is based on the jump of about 20 per cent in realisations per tonne witnessed in the quarter to June of the steel firms, compared with the preceding quarter.
These contracts do not form part of the data the government collects to calculate inflation. Analysts also say the proportion of sales through such contracts has increased since the freeze in spot prices in May.
Steel Minister Ram Vilas Paswan had said in late July that he had asked steelmakers not to increase prices in “national interest.”
The country is battling a 13-year high inflation and steel prices have a considerable presence in the wholesale price index that is used to measure inflation. Global steel prices have been rising in recent years on the back of robust demand from infrastructure, real-estate and automobile sectors in India, China and other emerging economies.
Iron ore prices have risen by 65 per cent and coking coal by over 200 per cent in the fiscal year ended March.