October 07, 2008

Cost pressures may push Indian steel makers to hike prices

It is likely that India’s integrated steel producers would increase domestic prices of both flat and long products in January 2008 to pass on part of the increased costs of raw materials like iron ore and coking coal etc.

The quantum of price hike is not known but looking at the global market situation, it could be in the range of INR 500 to INR 1500 for various products with flat products taking the major brunt. As most of them decide the monthly pricing policy, a decision is expected by the month end followed by announcements in early January.

An increase in prices will impact a wide range of industries, from automobiles to white goods. Automobile companies have already announced that they would be increasing the sticker price on passenger cars from January 2008 due to rising input costs.

Though the government does not usually interfere in such price revisions, union steel ministry constituted a committee earlier this year under a joint secretary with industry members to monitor the price situation.