Demand Spurs Steel Price Hike

Strong demand growth in the domestic market, steel producers are set to hike product prices by 1,000 a ton from March 1.

This will be the third rise in prices since February 1, 2019. “There is a growing demand for steel across sectors, and so all large producers are going ahead with a yet another price hike,” said an industry source in the knowledge of the development.

Domestic primary steel producers had upped prices of the commodity by 750 per ton from February 1, 2018. This had been the first hike in domestic steel prices since October, 2018.

“Domestic steel prices were in the range of 42,000-44,000 per ton depending upon various products. The hike in prices across products is about 750 per ton,” industry sources had said a month ago. Tata Steel, Sajjan Jindal-led JSW Steel, state-owned Steel Authority of India (SAIL), Naveen Jindal-led Jindal Steel & Power, and Rashtriya Ispat Nigam Limited are among top steel producers in the country and they had raised product prices by 750 a ton on February 1 after a gap of four months, and followed it up with another 1,000 hike in the third week of February.

Besides a spurt in demand, industry players attribute the increase in steel prices to a 17 percent increase in iron ore prices by NMDC.

Among the large steel producers, JSW Steel is the only player that buys ore from state-owned NMDC, while most other producers have captive source of ore. Besides, a majority of NMDC’s iron ore is lifted by the domestic sponge iron industry.

The consumption of finished steel in India grew 7.9 percent during April-December, 2018 as against 7.5 percent in the corresponding period a year ago, a CARE Ratings report said.

“There is no appetite to absorb so many price hikes but there is no option. With imports curtailed, consumers have no choice but to rely on domestic steel,” said a Mumbaibased dealer.