New Delhi: After cutting steel prices in the past two months, state-run SAIL on Monday said it is looking to hike the rates next month following a recovery in demand.
“We may increase steel prices in January as market is improving,” Steel Authority of India Limited chairman S K Roongta said.
He, however, did not give any price range of the proposed hike.
The steel maker had reduced prices of its flat steel products by up to Rs2,000 a tonne in the past two months, mainly on falling international demand.
Flat steel products are primarily used by the white goods and auto industry. SAIL had not altered the prices of its long steel products utilised by construction companies.
The firm had reduced prices of flat steel products by up to Rs500 per tonne in the first week of this month after cutting the rates by up to Rs1,500 in the last month.
The price structure of the company generally acts as a benchmark for the domestic steel companies. SAIL offers its products in the range of Rs29,000-40,000 a tonne.
Steel prices have globally recovered by about $50 a tonne to about $450 per tonne after falling by around $150-200 per tonne in the last two months due to fear of overcapacity in Chinese steel mills.
Import of cheap steel products had been pushing pressure on the domestic steel players to maintain a low price line.
“Import of hot rolled (HR) coils has increased by 20-22% and market price for this item has direct link with the imported price. Quantity may not be substantial but the import price sets the benchmark,“ Roongta said.
The quantum of import of HR coils — a vital steel input for sectors like auto — could not be immediately ascertained.
Steel imports have increased by 11% to 4.58 million tonnes in the April-November period of this year.
“If supply in the domestic market is more, it will naturally impact something at least,” Roongta said when asked if the current price structure would continue to hurt the margins of the domestic industry.
The company has seen its profit fall in past few quarters mainly on account of low sales realisation due to the weak price structure.
Roongta maintained that demand for steel products is not a problem though to the company.
“Steel demand till November has grown by about 8% (April-November). If it grows like this I think it can again touch double-digit growth,” he added.