Steel prices head north

Steel prices are rising again. Reacting to an over 40 per cent rise in freight and other input costs, public sector steel majors, Steel Authority of India (SAIL) and Rashtriya Ispat Nigam (RINL), have hiked prices for the third successive month.

While SAIL has done away with the rebates it had been offering, making steel more expensive in the hands of its customers, RINL has increased prices of most of its products.

Steel prices in India are ruling at around Rs 27,500 per tonne, close to the all-time high of Rs 30,000 per tonne it touched in March-April 2006. SAIL executives declined to discuss the development, but the official spokesperson of RNIL said it had increased the price of round steel products by Rs 200-500 per tonne and raised the price of TMT by Rs 500-1,000 per tonne.

On semis, the company has raised prices by Rs 800 per tonne. The private players, Tata Steel, Essar Steel and the Jindal Group, have not yet followed suit, but they may do so soon.

Analysts point out that there could be further increase of 5-7 per cent in steel prices early next year, when several big-ticket construction projects get off the ground and China re-enters the global iron ore supply market.

Result: that dream house just became more expensive.