Responding to cost pressure and greater demand, domestic steel producers have raised prices by Rs 1,000-1,500 a tonne across products for January, reports Business Standard. “Iron ore miners have increased prices by Rs 600 per tonne and so this increases the cost of production by Rs 1,000 a tonne. Hence, we have hiked prices from today (Thursday),” V R Sharma, managing director, Jindal Steel & Power (JSPL), told Business Standard.
With this, domestic steel players have raised prices for the fourth consecutive month in a market in which consumption is expected to pick up after the government announced a mega push for infrastructure projects.
Stock prices of all steel firms were up last week in anticipation of rise in demand for the commodity, mainly from the infrastructure sector, in the coming months. During October-December, long product producers such as Naveen Jindal-led JSPL and state-owned Steel Authority of India (SAIL) have recorded strong production figures, indicating a demand pick-up in infrastructure.
JSPL recorded 30 per cent sales growth in the December quarter at 1.66 million tonnes compared to the same period in the previous financial year. Demand for domestic iron ore has gone up after the increase in global ore prices.
Domestic iron ore prices are estimated at around $65 a tonne as against $85-90 a tonne for imported ore. Odisha-based miners have raised iron ore prices by around 10 per cent even as supply from the state hit an all-time high as steelmakers stocked the mineral in anticipation of a disruption when multiple mine leases expire at the end of this financial year.
India’s iron ore imports tumbled 90 per cent year-on-year during April-October, after a sharp escalation of 172 per cent in the comparable period last year, said CARE Ratings in its report.
This is the lowest level of imports recorded in the past seven years. Elevated global iron ore prices during the period prompted domestic steel players to opt for locally produced iron ore instead of importing the mineral at inflated prices, it said. Industry representatives expect ore prices to rise further by 10-15 per cent in the next three months because the difference in prices of domestic and imported iron ore is high.