Calcutta, Aug. 3: Tata Steel, Jindal Iron and Steel Company (Jisco) and Essar Steel have increased prices of hot-rolled coils by 3 per cent to 4 per cent from today.
In absolute terms, prices have shot up around Rs 300-500 per tonne in the case of Tata Steel and Jisco; Essar Steel has gone for a hike of Rs 500-Rs 1000 per tonne.
This is the first time since March 27 that steel firms have decided to charge more, though the rise was overdue for a long time, an Essar Steel executive said.
On March 27, the industry had given the government a commitment not to jack up prices in the short term amid strong resistance to it in the domestic market.
“However, with input costs rising over the past four months, no steel company can afford to keep its price-line unchanged. Coke and iron ore costs have gone up 10-12 per cent. If a part of this increase in production cost is not passed on to customers, steel companies will fall on tough times,” a senior Jisco official said.
The latest hike is only a minimum correction that will not affect retail users much, he added.
A Tata Steel spokesperson said the price increase would affect only 15-20 per cent of its buyers, given the fact that most of the others have long-term contracts.
Analysts watching the industry, however, say another round of revision could take place soon to bring prices in the domestic market in line with those abroad.
In the global market, hot-rolled coil prices have recorded a phenomenal rise over the past 10 days, both in the US and Europe. It is around $750-780 per tonne in the US and in the range of $650 to $680 in Europe.
“If you calculate European prices in rupee terms, our rates are lower by Rs 3000-4000. Against such a backdrop, we don’t expect fresh protests from steel consumers to the latest rise,” the Essar Steel executive said.
Steel Authority of India Ltd (SAIL) and Ispat Industries stayed away from a hike today, but sources say it is only a matter of time before they follow suit.