Mumbai: Indian steel makers have raised product prices effective 1 April to factor in rising raw material costs, boosting steel shares on Monday.
State-run Steel Authority of India, world’s No. 8 Tata Steel, India’s No. 3 producer JSW Steel, Ispat Industries and secondary steel maker Uttam Galva have all announced price increases for April.
SAIL hiked prices by Rs2,000 to 2,500 while Ispat Industries raised prices by Rs2,500-2,700 a tonne.
“The price hike is driven by cost on account of coke, iron ore and ferrous alloys,” said Jayant Acharya, a director at JSW Steel, which raised prices by 5-7% across all products this month.
“Cost push has become very severe now.”
Steel firms are expected to sign coking coal contracts with miners at around $200 a tonne April onwards, an increase of about 55 percent, adding about $16 per tonne to the cost of steel.
Iron ore prices have surged more than two-fold in the last 12 months on strong demand from China and a recovery in Europe and the United States to near $160 a tonne.
However, analysts do not expect any further price hikes in the near term.
“After the current price hike, majority of the cost push has been covered. We don’t see any more substantial hikes,” said Giriraj Daga, analyst at Khandwala Securities.
“The hikes will have a direct impact in inflation.”
Shares in JSW Steel closed up 2.34% at 1,280.8 rupees, Tata Steel jumped 4.06% to Rs678.75, Ispat Industries rose 2.51% to Rs20.40 while Uttam Galva and SAIL closed up nearly up 1%.