Dec 20, 2013, 04.52 PM IST
The proposed hike is likely to take the price of hot rolled coil (HRC), the benchmark steel product, to Rs 38,500 a tonne from Rs 37,500 per tonne now, said an industry source, declining to be identified.
Tags Steel makers, raise price, hot rolled coil (HRC), , benchmark steel product, higher freight charges, NMDC, Railway freight increase, SAIL, Tata Steel, Jindal Steel, JSW Steel, coking coal prices
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Steel makers may to raise prices by Rs 1,000/tonne nxt mth
The proposed hike is likely to take the price of hot rolled coil (HRC), the benchmark steel product, to Rs 38,500 a tonne from Rs 37,500 per tonne now, said an industry source, declining to be identified.
Like this story, share it with millions of investors on M3
Steel makers may to raise prices by Rs 1,000/tonne nxt mth
The proposed hike is likely to take the price of hot rolled coil (HRC), the benchmark steel product, to Rs 38,500 a tonne from Rs 37,500 per tonne now, said an industry source, declining to be identified.
The proposed hike is likely to take the price of hot rolled coil (HRC), the benchmark steel product, to Rs 38,500 a tonne from Rs 37,500 per tonne now, said an industry source, declining to be identified.
Steel makers had previously hiked the price in September by up to Rs 2,500 per tonne, but holding on to it since then despite the NMDC hiking iron ore price by Rs 100 a tonne and the Railways imposing peak session charge from October.
Subdued market conditions, due to poor demand from the end-use segments such as construction and white goods, also prevented them from jacking up the price. India's steel demand grew by just 0.4 per cent during April-November period of the current fiscal.
"Steel prices are set to go up again. This is primarily on account of increase in iron ore price and Railway freight increase. These together inflated the cost of steel production in the region of approximately Rs 700 per tonne," an official of a private steel maker said.
Barring Tata Steel and Steel Authority of India , domestic steel makers mainly source their iron ore requirements from NMDC. A further hike of Rs 200 a tonne in December by the state-owned iron ore producer has impacted private sector steel makers.
It generally takes 1.6 tonne iron ore to produce a tonne of steel. The cost push went up further by around Rs 200 per tonne with the Railways imposing its annual busy season charge on freights from October, he said.
"Steel makers have been rolling over prices since October this year. It has now started to pinch their bottomlines. Hence steel prices are expected go up by around Rs 1,000 pertonne," he added.
Steel makers have also found a new reason to pass-on the inflated costs to consumers as their share of exports are on the rise leading to overcapacity situation in the domestic market evening out. The price at the international level too is inching up and now holding at the level of USD 650 a tonne.
Also read: JSW Steel's main plant battling iron ore shortage
"Indian steel mills continue to increase their share of exports and hence, the oversupply situation in the domestic market is getting evened out. We are not in a position to absorb the cost anymore. We are confident the increase in prices will get acceptance with the customers," a steel maker said.
Most of the leading domestic producers including SAIL, Essar Steel, Jindal Steel and Power and JSW Steel had raised prices in August and September expecting a revival in demand.
Sharp increase in coking coal prices, on account of rupee depreciation, was also a major factor to effect hikes.
NMDC stock price
On December 20, 2013, NMDC closed at Rs 136.45, up Rs 1.15, or 0.85 percent. The 52-week high of the share was Rs 171.50 and the 52-week low was Rs 92.65.
The company's trailing 12-month (TTM) EPS was at Rs 14.25 per share as per the quarter ended September 2013. The stock's price-to-earnings (P/E) ratio was 9.58. The latest book value of the company is Rs 69.39 per share. At current value, the price-to-book value of the company is 1.97.
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