Steel prices are back on the rise and are set to go up further in the coming months. After the excise duty hike of 2 per cent announced in the Budget, steel companies across the country announced a price increase of around Rs 600/tonne.
But, according to industry insiders, steel prices have shot up in excess of Rs 1,000/tonne as prices for raw materials such as iron ore are going north.
“All companies have increased prices by more than Rs 1,000/tonne although they won't admit it. The excise duty hike only needed an increase of Rs 600/tonne.
“But raw material prices are on the rise and if NMDC moves to monthly pricing of iron ore, then steel prices will increase further,” said an official from a leading steel company.
“There is also a problem of low iron ore supply, which is pushing up the commodity's prices. Iron ore price is one of the key reasons why steel companies are being forced to raise prices,” said the official.
Steel traders in the Delhi region also said that steel majors have raised prices by more than Rs 1,000/tonne. Coupled with the increasing raw material costs, strong demand for steel is set to push prices further north in the coming months. “With numerous automobile manufacturing units coming up across the country and an improvement in construction activity, steel demand in the country is on the increase and it will keep the upward price momentum in steel prices,” said a steel industry official.