| On a roll
Calcutta, Aug. 27: Another round of steel price hikes in the range of Rs 500-Rs 1,200 per tonne looks imminent from the first week of September in spite of rising protests from buyers balking at frequent increases.
The top brass from Tata Steel, Vizag Steel Plant and Steel Authority of India (SAIL) met in Calcutta on Tuesday to discuss the quantum of the rise, particularly for long steel items. Sources familiar with the development said prices would go up across the board in a market feeding on an unprecedented demand spike.
A official conceded the domestic demand for the long products is so high that most manufacturers are not able to maintain even a week’s inventory.
“The scenario was completely different a year-and-a-half ago with all the major steel firms running more than a month of inventory. Now, there are customers who have approached firms to secure steady supplies,” he added.
The planned price revision will take to Rs 3000 the increase in net sales realisation per tonne over the past four months.
Both Tata Steel and SAIL refused comment on the issue. A Tata Steel spokesperson merely said hikes would depend on market dynamics. “We cannot comment until we are ready for an announcement,” he added.
Ispat Industries’ spokesperson said it was the market that was driving up prices and companies on their own hardly have the leverage to sway it their way.
Buyers, many of them north India’s companies that use steel as an intermediate, are railing against plans to jack up prices again. The Steel Consumers’ Federation is meeting the top-brass of Tata Steel, VSP and SAIL in Ludhiana today in an effort to nip the move.
“Already, secondary steel producers are bleeding because of the hefty hike in prices. Any further increase will sound the death-knell for us,” an official said.