Steel minister Ram Vilas Paswan exhorted steel companies to stop raising prices, but his second plea in less than a month seemed to fall on deaf ears.
Prices of basic steel such as hot-rolled coil increased between Rs1,500 and Rs2,900 a tonne on 3 March, and the public sector enterprise, Steel Authority of India Ltd (SAIL), raised prices between Rs1,500 and Rs2,500 on Wednesday. Prices are usually reviewed on the first of the month.
According to Prem Gupta, joint secretary of the West Bengal Rolling Mill Association, SAIL had halted countrywide sale of steel on Wednesday morning, anticipating a price increase.
Earlier this week, Essar Steel Ltd raised prices by Rs2,500 a tonne, Tata Steel Ltd by Rs2,810 a tonne and JSW Steel Ltd by between Rs2,500 and Rs3,000 a tonne. Executives at Ispat Industries Ltd and Jindal Steel and Power Ltd said they “are still undecided” about prices, but end users say Ispat has upped the basic grade price by Rs2,500. “Following the price increase of private producers, SAIL has also increased prices between Rs1,500 and Rs2,000 a tonne across categories,” said S. K. Roongta, SAIL’s chairman.
Against rising material costs of iron ore and coking coal globally, domestic hot-rolled steel prices have risen by 7-8% and construction steel by over 25% in the past year.
End users of hot-rolled coils, such as Uttam Galva Steel Ltd, which makes galvanized steel for automobiles, have similarly increased prices by Rs3,000 a tonne to Rs53,000 a tonne. “We have increased the prices because our raw material cost, which is hot-rolled coils, have gone up,” said Uttam’s director, Ankit Miglani.
At a seminar organized in the Capital by the Indian Chamber of Commerce to address the challenges facing the industry’s upcoming projects, Paswan said it is in the companies’ interest to keep prices in check after working out the ratio of raw material costs such as iron ore—especially if it seeks any tax benefits and incentives. “Otherwise, it will be difficult for me to demand benefits for the industry from the finance ministry in future,” he cautioned.
Prashant Amin, Essar’s vice-president for sales and marketing, said, “While we appreciate the minister’s concerns, there has been a cost pressure…our cost of production has gone up.”
On 15 February, Paswan asked seven big steel producers to cut prices— by Rs500 a tonne for hot-rolled coils and by Rs1,000 a tonne for certain grades of wire bars used in construction. While all the companies agreed to reduce prices, Mint reported on 21 February that a few companies had only partially reduced prices.