Steel is likely to get costlier after the New Year with major steel-makers indicating another price hike from January due to surging raw materials.
"Steel prices are likely to move upwards further due to increasing coal and iron ore prices. It seems there will be a severe cost pressure on steel mills, which will lead to a price hike in January," JSW Steel''s vice-president (sales and marketing), Sharad Mahendra, said here."It is very difficult to say the exact hike (on amount basis) which would happen in January, but in terms of percentage it could be between three to five per tonne," he said, adding both coal and iron ore prices are expected to increase more in future.
Coking coal and iron ore prices have gone up from $220 to $230 per tonne and USD 130 to $150 per tonne, respectively. It is expected these raw materials prices would increase further in the near future. It is understood that steel-makers are likely to increase prices between Rs1,000-1,200 per tonne in January.
Some steel-makers like Steel Authority of India (SAIL) recently increased prices of its long products by Rs300-500 per tonne and JSW Steel raised its hot-rolled coil prices by 1-1.5%.Essar Steel has also indicated that steel prices are expected to go up further due to a rise in coal and iron ore costs and the firming-up of global steel prices on the back of a recovery in China."We expect steel prices to go up in January due to higher raw material costs. Though globally, steel prices are at an improved level, it is because of high raw material prices. We expect steel prices to go up over three per cent per tonne in January," Essar Steel''s executive director (Sales and Marketing), Vikram Amin, said."Input costs have gone up substantially and the margins are tight now. As both coal and iron ore prices have soared substantially in the recent past, we expect another price hike in January," he said, adding the hike is likely to have an impact on the automobile industry and other consumer goods as steel is the main raw material for most products.