Steel Authority of India Limited (SAIL) on Wednesday indicated that with imports of steel becoming costlier, the company would have a close look at whether to hike prices or absorb them.
However, other industry players clearly indicated that steel prices are likely to go up by around Rs. 1,000 per tonne from next month onwards.
SAIL Chairman C. S. Verma said that imports of steel would be costlier by Rs. 1,000-1,500 per tonne due to a hike in customs duty on flat products. “Now, import duty on flat steel has been increased from 5 per cent to 7.5 per cent. Thus, the import of steel for flat products will become costlier by around Rs.1,000-1,500 per tonne,” he told journalists.
Mr. Verma said the company would make a demand and supply situation analysis and if the market permitted and could absorb, the company would take a call accordingly. Steel firms generally review prices at the beginning of a month on the basis of the demand-supply situation at that point of time.
The duty hike, though not to the extent of the demand of the domestic steel makers, who wanted it to be 10 per cent, is aimed at discouraging imports of steel from countries such as China, Russia, Korea and Brazil. The move would ensure more business for the domestic steel industry.
“Two per cent increase in excise duty means costs will go up by Rs.500-1,000 per tonne. It will be passed to consumers,” Jindal Steel and Power's CFO Sushil Maroo. Rashtriya Ispat Nigam (RINL) Chairman A. P. Choudhary said certainly, this increase in excise tax rates would have impact on prices, but the extent would depend on the absorbing capacity of the market.
“The cost push due to increased duty and iron ore freight rates is Rs.1,000 per tonne. So, the price increase will not be less than that. This will get reflected in prices by the end of this month,” Essar Steel (India) CEO Dilip Oomen told reporters here on the sidelines of a conference organised by information portal Steel Guru.
Other leading producers, RINL, JSW Steel and Jindal Steel and Power (JSPL) also echoed similar sentiments.
Keywords: steel prices