Indian steel maker eying price hike on higher input cost

The Statesman reported that Indian domestic steel prices are likely to go up by around INR 1,000 a tonne soon on account of increase in freight charges by the Railways and hike in iron ore price by National Mineral Development Corporation.

Mr TK Chand commercial director of Rashtriya Ispat Nigam said that “There is a compelling case for steel prices to move up by around INR 1,000 per tonne in the coming months as NMDC has hiked iron ore prices and the peak season charges imposed by the Railways.”

Noting that NMDC had hiked iron ore prices by INR 200 a tonne earlier this month, industry officials said that this will translate into a INR 320 per tonne hike in steel production cost as roughly 1.6 tonne iron ore is required for producing one ton of finished steel.

In a double whammy, the Railways has decided to levy its annual busy season charge on freight which will increase the rates by 15% between October this year and March next year. According to industry officials, transportation cost for iron ore will be increased by over INR 300 per tonne for steel companies.

The RINL official said that “I think, some of the cost will be passed on to the end consumer.”

An official from a private sector steel company also echoed similar sentiment.