Domestic steelmakers on Wednesday raised the cost for hot-rolled coil (HRC) by almost 6%, apparently to offset the influence on their margins from a hike in iron ore costs effected by miners, powerful December 1. HRC, a benchmark solution, will now be priced Rs 47,500-47,650 a tonne.
Even soon after the cost hike, domestic steel would be less expensive by about 4-5% compared with the landed price of imports from Korea, a nation with which India has cost-free trade agreement (FTA) pact, offering domestic firms scope to raise the cost additional.
“We have also increased the price along with other steel players. Today our HRC price is around Rs 47,500-47,650 per tonne in Chennai, Mumbai and Delhi. We are forced to hike prices as iron ore prices have again inched up,” mentioned VR Sharma, managing director, JSPL, mentioned.
With impact from December 2, NMDC raised the cost for each lump and fines ore by Rs 500 a tonne to Rs 4,500 per tonne and Rs 4,110 per tonne respectively. Domestic miners primarily take cue from the state-run miner for effecting any revision in the cost of the essential steel-producing raw material.
Apart from the rise in iron ore costs, buoyant domestic demand (7.7% rise month-on-month in October), the under-regular production from the secondary steelmakers who normally contribute almost 40% of the country’s total steel production and a superior prospect for exports are maintaining steel costs at an elevated level.
Limited import chance is also maintaining the costs higher. Japan and Korea have now began exporting a lot more to Europe due to the fact realisations are much better in these nations compared to India. In addition, domestic demand in these two nations is also buoyant now.
The increasing trend in the domestic cost of steel is anticipated to continue till China devours all its steel in the domestic marketplace leaving other nations which applied to rely on China for steel to appear out for alternate sources which includes India, the provide of iron ore becomes normal in the domestic marketplace and secondary steel producers resume regular production.