New Delhi: A host of items, such as kitchenware, may soon become costlier with stainless steel makers planning to raise prices following a threefold jump in nickel prices in global markets over the past one year. Nickel is a key input in making stainless steel.
“Nickel prices in global market have shot up to $44,405 (Rs19,09,415) per tonne this year as against $13,505 per tonne last year, making it difficult for the industry to contain prices and hence making the finished alloy very expensive,” Indian Stainless Steel Development Association (ISSDA) president N.C. Mathur said.
In a representation to the government, ISSDA has sought a reduction in duty on nickel and stainless steel scrap, arguing that such duties not only act as a deterrent to the sector’s growth but were making the finished product very expensive.
Nickel, a key input for making stainless steel, attracts 5% import duty. The sector, which requires 36,000 tonnes of nickel every year, is dependent on imports as there is little available in India. According to Mathur, as much as 75% of the stainless steel produced in India is used to make kitchenware and household utensils and a price rise would affect the common man.
“One tonne of stainless steel grade AISI 304 (accounting for 65% of global production) needs a minimum of 8% nickel and at present price levels, this single input takes nearly 70% of production cost,” he said.
Prices of stainless steel, which are around Rs220 a kg, could be increased soon if taxes are not reduced, Mathur added.
Countries such as the US, Japan, Korea and Taiwan do not levy any customs duty on import of nickel and stainless steel scrap while China reduced duties to 1% last month.
India produces 1.7 million tonnes of stainless steel in a year. This is 4% of the total steel output but accounts for nearly 20% of the sector’s revenues.
About two-thirds of global nickel output is used in stainless steel manufacturing, and the industry demand is projected to surge by 7.5% this year. “One per cent nickel accounts for $400 per tonne in the final cost of making stainless steel at current nickel prices. So, it is still very expensive,” Mathur said.