Mr Rajesh Shah chairman of Mukand Limited in an exclusive interview with CNBC-TV18 spoke about the latest happenings in his company and sector.
Mr Shah said that the company has announced the price rise adding that it will be implemented in May or June. He further said that prices will be hiked from INR 4,000 to INR 6,000 a tonne depending on the grade of the steel.
Here is a verbatim transcript of the exclusive interview with Mr Rajesh Shah on CNBC-TV18.
Q - Is there a price rise on the cards?
A - We are manufacturers of alloy steel long products, which go mostly into the automotive industry and stainless steel, which is exported out. So, yes, there are price increases that are taking place now. We would be increasing anywhere from INR 4,000 to INR 6,000 a tonne depending on the grade of steel because we make 100s of grades of steel.
Q - And that is expected anytime now or has it already been announced?
A - We have just announced it. It is to be fully implemented now; it would be implemented over this month and next month I guess. It is largely due to very sharp increase in iron ore prices and also metallurgical coke which is used in our manufacturing, so that also has increased very sharply in the last three months. So it is necessitated by that.
Q: We have seen some of these metals and commodity prices correct a bit because of what is happening in China and elsewhere in the world. Do you think that over the medium-term, you might have to bring down prices again or what is your outlook as an industry veteran on some of these commodities?
A: Stainless steel prices depend a lot on the international price of nickel. So nickel which has risen very sharply at London Metal Exchange (LME) over the last two-three months, but it has declined also quite rapidly over the last six-seven days. So if there is a decline in the price of nickel or any other such commodity that would reflect then in a downward price in steel prices. In alloy steel, there is not yet that much of a downward correction in any of the commodities that we are generally buying as I just mentioned like iron ore.
Q - The price rise that you have announced does it entirely meet the raw material price rise or is it little more and that will give you some improvement in margins?
A - The improvements in margins have to come essentially from our own work and own efforts and this is more to cover the cost increases that have taken place.
Q - The noises one hears from the European Union on the chances of imposing an anti-dumping duty on stainless steel imports, has such an anti-dumping been actually imposed or is it only a threat? Do you import at all to that region?
A - We as a company and there are several exporters of stainless steel wire and stainless steel bright bar to the European Union. Yes, there are no duties that have been imposed as of now in the recent past, but a kind of investigation or rather an investigation as to why we should not investigate more and to study that certain products of stainless steel has begun. But we must understand that the European Union consist of 25 countries and it maybe that only three-four countries are producers of these items and who would be the ones who would want to take this forward, while the rest of the countries are consumers and they would be happy if the prices are lower and if they could import. So it’s not yet a done deal as far as duties are concerned. I think most of the manufacturers and exporters of India can easily justify that there is no cause at all for any action.
(Sourced www.moneycontrol.com)
