Steel makers hike prices by up to Rs 1,500 per tonne

NEW DELHI: Domestic steel makers, including state-run SAIL, have raised the prices for both long and flat products by up to Rs 1,500 a tonne, to partially offset the inflated production cost due to hike in freight rates.

"Steel companies have raised the price by up to Rs 1,500 per tonne with effect from April 2. The hike is to partially offset the increased cost of production," industry sources said requesting anonymity.

However, except SAIL, no other steel makers confirmed the hike in the prices.

When contacted, a JSW Steel official said "no hike" was effected.

Steel Authority of India has raised the price of long products by up to Rs 1,000 per tonne, but kept the price for flat products unchanged.

However, sources said, other steel makers have increased the prices for both long and flat products on the back of good demand from construction and automobile sectors.

Long products are used in construction sector and flat products are used in the making of cars and consumer durables.

Steel makers generally hike the prices at the beginning of the month analysing the demand-supply situation and the absorbing capacity of the market.

Railways had effected a hike in freight charges in the first week of March which impacted the cost of transportation of iron ore by up to Rs 1,400 a tonne.

At the same time, hike in excise duty in the Budget to 12 per cent from 10 per cent earlier also impacted the cost by up to Rs 1,000 per tonne.

"It takes 1.6 tonnes iron ore to make a tonne of steel. So, the hike in transport costs of iron ore alone has impacted us by over Rs 2,000 per tonne. Thus, we have not passed the entire burden to the consumers, only a part of it," a source said.

Price for long products are hovering between Rs 39,500 and Rs 41,000 a tonne, while CR Coils' cost Rs 44,500 a tonne.