New Delhi: Steel Authority of India Ltd (SAIL), the largest state-owned steel company, has hiked the price of its products by Rs 1,000 per tonne, with effect from March 1. The decision to increase its prices comes in accordance with global trend and firming of iron ore prices, sources said. This is the second time the state-run steel major has increased its prices in two months.
Other steel producers like Tata Steel, Naveen Jindal-led JSPL, Essar Steel and JSW Steel are also likely to follow in the footsteps of SAIL in the coming days, industry analysts said. Apart from the burst in demand, industry players attributed the increase in iron ore prices for the hike.
Following a four-month gap, steel companies raised prices by Rs 750 a tonne on February 1, and hiked the prices again by another Rs 1,000 in the third week of the last month, making the most of the steep prices around the world. At present, steel prices range around Rs 42,000-44,000 per tonne depending on many products.
Global surge in iron ore prices
With a 30 percent rise globally, iron ore prices have shot up to US$ 90 per tonne as of February from US$ 69 per tonne in December. State-owned miner National Mineral Development Corporation (NMDC) raised its rates by as much as 17 percent. JSW is the only large player that purchases ore from NMDC. Most other steelmakers have captive source of ore.
“We foresee domestic iron ore prices rising 3-4 percent during calendar year 2019. This would have a direct bearing on 62 percent of the steel production that is based on supply from merchant miners. Further, domestic steel prices are expected to soften following global cues,” said Prasad Koparkar, senior director, CRISIL Research.