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Steel firms increase prices

Domestic primary producers, especially those manufacturing flat products, are likely to raise the prices of steel products this month.

Through the past few months, steel makers have been facing cost pressures. However, they haven’t been able to raise the prices of their produce. Despite the Union Budget announcing a rise in import duty on coking coal, mills avoided a price rise.

Now, however, some flat product makers have begun raising prices. And, experts say it is likely others will follow.

A source said Essar Steel has raised product prices by Rs 500 a tonne for this month.

While flat steel products are widely used in the automobile sector, long products are primarily used in the construction and infrastructure segment, which is currently seeing sluggish demand due to the ongoing monsoon season.

“Domestic iron ore prices are firm compared to global prices and so, input costs are rising,” said the source. “Not just that, the rise in diesel prices is also leading to a rise in transportation costs. Therefore, there is no option but to pass the cost push to consumers.”

Meanwhile, which is present in both the flat and long product segments, has decided to keep prices unchanged. “There is certainly a cost push. But seeing the weather, due to the monsoon, the demand is not likely to pick up. In the third week (of this month), we will perhaps get a better idea and maybe, some upward revision could be there for October,” said a company source.

Long-product producers such as Steel Authority of India and Rashtriya Ispat Nigam Ltd (RINL) have decided to keep prices unchanged.

“We are yet to take a call on price revision but the overall view is prices of at least some products will be kept unchanged,” said an RINL official.

Higher and cheaper imports of long steel were forcing domestic steel producers to keep prices unchanged, dealers said.

Most primary domestic steel producers haven’t raised prices in the past couple of months.


KEY TRIGGERS

  • Diesel price raised by 50 paise a litre
  • Coking coal import duty raised by 2.5 per cent
  • Rail freight rates raised by 6.5 per cent

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