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Steel firms hike prices by 3-4 percent
By siliconindia
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Friday, 11 January 2008, 19:23 IST
Due to high input costs and increasing international prices three of India's top steel makers hiked prices on Wednesday. The three to four percent increase is unlikely to have a major impact on user industries such as construction, capital goods and automobiles. To nullify the anticipated hike, construction companies have already hedged steel prices. However, auto firms have already announced price hikes.
Tata Steel, Essar Steel, and JSW Steel hiked prices for hot rolled coils by Rs 700-900 per tonne with immediate effect on Wednesday. Hindustan Times had reported in its December 20 edition that domestic steel firms were planning to increase the prices in the first week of January. According to analysts, the prices will increase by the end of March.
"here is an increase in international prices and input costs are moving up. We cannot pass it on the current costs," said MV Sheshagiri Rao, Director finance, JSW Steel. Globally prices have gone up by $30-40 per tonne while raw material costs have almost doubled during the calendar year.
As per analysts, the current demand for steel is expected to continue with the boom in construction and infrastructure sectors. "Currently, the demand is very good for steel. However, raw material cost push-impacting margins is forcing companies to increase the prices. This will help them to continue margin expansion, though the companies may not be able to pass the entire price hike to the margins," said Chirag Khasgiwala, analyst with Emkay Stock Broking.