Steel prices may rise by Rs 1,500/t

MUMBAI: Steel companies are likely to increase product prices by more than Rs 1,500 per tonne from January 1, driven by a recent rise in coal and iron ore costs and also due to the firming up of international steel prices on the back of a recovery in China, the world’s largest metals market.

This is likely to result in a rise in the prices of various goods including cars and other consumer goods as steel is the main raw material for most products , said industry executives.

Quarterly contract prices of coking coal, primarily used by steel companies, was late Tuesday settled at a 12.5% hike between Japanese steel mills and Australian miners. “The contract price range will be in the $221-225 per tonne bracket. This is the price level at which Indian steel companies will buy from overseas coal companies,” said Vishal Agarwal, managing director of Kolkata-based Visa Steel that buys more than half of its coal requirements from overseas markets.

While talks between Japanese steel mills and Australian miners on iron ore prices are currently continuing, international analysts have forecast a 7-8 % rise in prices due to a revival in the Chinese steel market.

Coal and iron ore supplies are typically guided by quarterly price contracts, after the industry switched from an annual contract, to represent the volatility in prices after strong demand and tight supplies put pressure on the prices of resources