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Steel prices all set to escalate

business Updated: Dec 20, 2007 23:34 IST
Vyas Mohan and Indulal PM
Vyas Mohan and Indulal PM
Hindustan Times
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Amid higher international steel prices and freight rates, domestic steel manufacturers are expected to increase the prices of hot rolled steel by Rs 1,000-2,000 early next month.

Major steel companies in the country including Sail, Tata Steel, JSW Steel, Ispat Industries and Essar Steel are expected to announce the price hikes in early January, sources said. Uttam Galva Steel has announced a Rs 1,000 per tonne hike in its galvanised products on Thursday, citing strong market fundamentals and order book positions.

“Globally prices have gone up by $30-40 per tonne. Japanese exports to China are increasing. There was an increase of $10-15 per tonne on export of slabs from Brazil. Besides this, raw material costs have almost doubled during the calendar year. All these things indicate that there are chances of a price hike. However, our board will consider the issues and take a decision by the end of this month," said MV Sheshagiri Rao, Director Finance of JSW Steel.

Apart from spot price of hot rolled steel, freight charges have also increased considerably, thus pushing up the cost of landed steel.

“Higher spot prices of HR steel and the increase in freight charges have caused a $50 impact on the cost of landed steel. But domestic steel companies have not increased prices over the last four months. Thus, one could expect an increase of around Rs 1,000-Rs 2,000 per tonne on HR steel in January,” said an official of a renowned steel company, who wished not to be named.

In the recent past, several international steel companies had announced price increases on HR steel. For instance, the Japanese steel giant Nippon Steel announced on December 18 that it would increase prices by 4 per cent starting January.

On Thursday, while shares of Sail closed higher by 2.30 per cent at Rs 264.25, Tata Steel shares closed almost flat at Rs 824.80. Shares of Jindal Steel gained 1.33 per cent to end the day at Rs 13,805.30, while those of JSW Steel closed at Rs 1,233.90, up by 1.16 per cent.