An increase of Rs 2,000 a tonnes expected on rising input costs.

Steel companies are likely to increase prices by at least Rs 2,000 a tonne from April, on the back of higher raw material costs. Contract prices of both raw materials for steel, coking coal and iron ore, were increased 50-70 per cent recently. Following the hike in prices overseas, domestic iron ore producer NMDC is also planning to raise prices.

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Ispat Industries Director (Finance), Anil Sureka, said an increase was certain, but the company was still discussing the extent of the hike. “The increase will be effective from April 1,” he added.

Jayant Acharya, director (sales and marketing), JSW Steel, said prices of some raw material were still under negotiation. “NMDC has not yet announced anything. The increase could be after a few days,” he added. Steel Authority of India (SAIL) is likely to increase prices from April 1. The increase would be both in long and flat products.

And it’s not just domestic steel producers. Globally also, steel producers have announced significant rise in prices as raw materials have become more expensive.

Korean steel giant Posco announced a 20 per cent increase in steel prices from May. However, the company is yet to decide whether it will be done in one go or in small steps. ArcelorMittal South Africa announced a surcharge of $81 a tonne due to cancellation of an iron ore contract, which implied that the company would now have to buy on spot basis.

Vale and BHP Billiton have decided to sign quarterly contracts for iron ore to cash in on the buoyant market. Japanese Steel Mills (JSM) have agreed to pay 90 per cent more for iron ore contracts with Vale. JSM contracts are usually considered as the benchmark for pricing. Coking coal is also moving to quarterly contracts. While iron ore accounts for 35 per cent of the raw material cost, coking coal accounts for 50 per cent.

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