Steel companies hike prices on rising raw material costs
Financial Express

Rising input costs of raw materials like iron ore and coking coal have compelled steel Companies to increase prices for the second consecutive month in the current calendar year. Tata Steel has increased the prices of hot rolled (HR) coils by Rs 2,000-2,500 per tonne, country’s largest steel producer Steel Authority of India Ltd (Sail) by Rs 1,500-2,500 per tonne and Essar Steel by Rs 2,100-2,400 per tonne. Others like JSW Steel and Ispat Industries are also expected to hike prices shortly.

In January, steel Companies had hiked prices by Rs 1,500-2,000 per tonne after the last revision in October 2007, when prices increased between Rs 400 and Rs 800 per tonne across various products. Currently, HR coils prices, which is a base product on which the prices of other downstream steel products are based, ranges between Rs 28,000 and 29,000 on an average, and with the current round of increase would cross the Rs 30,000 benchmark.

According to industry experts, the prices of iron ore scrap and coking coal have increased by around 45% and 165% in the last few months and the Companies are forced to pass on the burden to the consumer. “Price rise in the input material coupled with increased demand in steel using sectors is fuelling steel prices,” said assistant vice-president, National Commodity and Derivatives Exchange Ltd, Ramesh Iyer.
Asked if there was a possibility of forming a cartel among domestic steel Companies, Iyer said, “Steel prices in the international market have also gone up significantly owing to rise in input cost. The impact is also because the state-owned National Mineral Development Corporation Ltd increased iron ore prices for long-term contracts.”

Recently, the country’s largest iron ore producer, National Mineral Development Corporation Ltd, had increased prices of iron ore by over 47% to about Rs 1,780 per tonne. Before the price hike, which came into effect from October 1, 2007, the iron ore producer used to sell the raw material with 64% iron content for the long-term contracts at around Rs 1,200 per tonne. Iron ore prices in the spot market are, however, as high as Rs 4,500-5,000 per tonne.

Steel prices up 8 pc on cut in Chinese production
Hindustan Times

Major Indian steel producers announced an 8 per cent hike in steel prices on Friday pointing towards a period of higher prices. The move comes amid reports on Chinese steel industry website mysteel.com that more than 50 Chinese steel producers were cutting their output due to frequent power cuts.
This is the second consecutive month when steel prices have been hiked. The quantum of the hike at Rs 2,000-Rs 2,500 per tonne is seen as a bold move by steel makers and indicates a persisting demand-supply gap.

Ankit Miglani, director commercial, Uttam Galva Steel, said: “The next two quarters will be good time for the steel industry. The prices are likely to go up further.” Uttam Galva, JSW Steel, Essar Steel, Tata Steel and Ispat Industries have all hiked prices, industry sources said.
The immediate reason being offered by most steel makers is the hike in iron ore prices by the National Mineral Development Corporation (NMDC) with retrospective effect from October 1, 2007. NMDC could hike ore prices again in April 2008, sources said.
International steel prices have gone up too. The landed price of imported steel is around $720-750 (Rs 28,800-Rs 30,000) per tonne. The freight cost has also moved up sharply in the last few months, from around $200 a tonne to $450 a tonne. These increases provide Indian producers enough cushion to hike prices.

The January-February period is usually a high demand period as companies reduce their stocks in December for the financial year end and re-build their inventories again in January and February. This year, lower production in China has also been factored in. Steel mills in China have been hit by shortage of power with demand soaring in one of China's harshest winters this year.
The supply shortage and the normal increase in demand have created a comfortable situation for the steel makers to raise their prices in India. An industry source said: “If iron ore prices are hiked again in April it will lead to a further increase in steel prices.”

Steel prices hiked by Rs 1,500 to Rs 2,500 a tn
Business Standard

Steel companies on Friday hiked prices by Rs 1,500-Rs 2,500 a tonne for various products, on higher input costs and strong demand.

Tata Steel hiked spot prices on hot-rolled steel by Rs 2,000-Rs 2,500 a tonne, Ispat Industries by Rs 2,000 a tonne, Essar Steel hiked prices on all products by Rs 2,100-Rs 2,400 a tonne and Uttam Galva Steels Rs 2,000 a tonne for galvanised steel.
The Steel Authority of India Ltd also announced a hike of Rs 1,500-2,000 a tonne on flat and long products. The ruling price of HR coil is around Rs 30,000 a tonne. The hike in prices is with immediate effect, the companies said. Officials of JSW Steel could not be reached for comment.

Industry sources said the hike was largely led by rising prices of key inputs. Spot prices of coke have increased from $200 to $500 a tonne since November 2007, while iron prices went up by Rs 600 a tonne in October, resulting in an impact of Rs 1,000 a tonne on every tonne of steel.

Freight rates have also gone up from $35 to $65 a tonne in the past three months. This is the second increase in prices in the calendar year. In January prices were hiked by Rs 600-Rs 900 a tonne. Company executives are nevertheless optimistic as demand has been strong. About three lakh tonnes of steel stocks that had built up at the beginning of January has nearly been cleared.

Globally also prices are on an uptrend. In Europe prices were hiked by $50 a tonne last month and another similar hike ($50 a tonne) is expected next week. In North America, prices have moved up more than $100 a tonne.

The production loss in China due to electricity shortages following freezing weather would also impact prices in the coming months. The steel industry expects prices to move up further in the next two quarters. “This is season time and the next two quarters look very good,” said Ankit Miglani, director (commercial), Uttam Galva Steels.