In the wake of higher domestic demand for steel, India's largest steelmaker Tata Steel (TATASTL.BO : 411.75 +22.75) on Friday raised prices of flat steel by Rs 500-750 per tonne with effect from June 2009.
"Prices of hot-rolled (HR) coil and cold-rolled (CR) steel products have gone up in select regions for monthly contracts," a Tata Steel spokesperson told FE.
It is learnt that that hike in price of the commodity has been on the back of improved domestic demand from sectors, including construction and automobile, and the recent uptrend in global steel prices. The prices of HR coil in India are currently about Rs 24,000 per tonne and CR coil sells at about Rs 26,000 per tonne.
Tata Steel shares on Friday were up 5.85% to close at Rs 411.75 on the Bombay Stock Exchange (^BSESN : 14521.89 +256.36) (BSE).
JSW Steel, the third largest steel producer in India, may raise price of its galvanised steel by $25 to $30 per tonne. "Zinc prices have gone up from $1,000 to $1,500 per tonne. Taking that into consideration, we are exploring the possibility of increasing rates of galvanised steel. However, no decision has been taken yet," said Seshagiri Rao, joint managing director and group chief financial officer, JSW. JSW Steel would currently keep prices of its HR and CR coils stable for July. Galvanised steel sells for about Rs 32,000 to 34,000 per tonne in the country.
JSW Steel Ltd shares on Friday rose 5.52% to close at Rs 605.10 on the BSE.
When contacted, Steel Authority (SAIL.NS : 152.45 +0.9) of India Ltd (SAIL) said, "No, we have not increased our prices."
Ispat Industries Ltd (NIPPONDEN.NS : 0 0), on the other hand, is yet to consider price hike for its product. Declining to give any details, Anil Surekha, director-finance, Ispat Industries, said, "We will decide about any change in steel prices in the next week."
Similarly, an Essar Steel spokesperson said, "The company is currently reviewing the market."
According to experts, Indian steel companies have seen an over 10% y-o-y growth in sales in May this year.
Niraj Shah of Centrum, said, "The price hikes show that demand is increasing and there is an appetite for consumption." Steel players have already shifted their focus on growing domestic sales as exports have taken a backseat owing to a 60% correction in global steel prices.
Meanwhile, economic think-tank Centre for Monitoring Indian Economy expects steel prices to fall by around 5% in the next three months.
"The expected dip in contract prices of iron ore and coal will put pressure on steel prices. We expect prices to decline by around 5% in the next three months," CMIE said in its monthly review of the Indian economy for June.
Domestic steel makers have urged the ministry to increase import duty on the alloy to 15-20% from 5% now or impose safeguard duty of about 25%. "Any restrictive measures to curb imports, if implemented, will narrow the gap between the domestic and international prices to a maximum of 7-8%. This indicates that prices have not bottomed out yet," CMIE said.