With international prices expected to surge by more than $100 for the next quarter, local steel majors are expected to crank up their prices too.
Steel Authority of India Ltd has said that prices would move in tandem with global prices. S K Roongta, director (commercial) SAIL said prices in the domestic market would move in tandem with global prices. He also pointed out that the demand in the domestic market was strong.
Essar Steel, Jisco and Ispat Industries would take a call on prices next month. Tata Steel has already announced that it would go for a hike in prices from April for its long-term contracts.
Essar executives said, prices are revisited on a quarterly basis and we will take a review only at the end of March.
Jisco officials said, we are not increasing prices in the next few days and will take a call on April later while Ispat officials said, prices for April would be reviewed only next month and prices for March were not being hiked.
Industry sources said that the US market was extremely strong and major players have indicated a price increase in flat products to the tune of $100 per tonne for the next quarter.
However, the European steel companies have come up with a more conservative increase of $30-$40 per tonne. On an average prices hot rolled coils in the US were hovering around $640 per tonne.
Jisco executives said the indicators suggest average steel prices in the current year would be much higher than those prevailing in the previous year.
China was also showing good demand. Buying in China had just opened after New Year and was likely to continue.
Apart from a booming economy, another reason for price increase was raw material prices.
Contracts for coal had just been renewed and the prices were revised upwards to the tune of 120 per cent for coal. However, coke prices were expected to be in the region of $240-$300 per tonne.
Iron ore prices were expected to be increased by 60-90 per cent. However, the Chinese buyers, were not willing to absorb more than a 30 per cent hike in iron ore prices.
Moreover, inflation had also eased, fuelling a case for steel price hike. Last August, all steel companies came out in support of the government and to keep inflation in check slashed prices by Rs 500-2,000 per tonne.
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