Signalling a pick-up in demand, JSW Steel Ltd plans to increase steel prices by two per cent from January.
The mark-up in prices would range from Rs 700 to Rs 1,000 a tonne, depending on the product specification.
Other major steelmakers such as Tata Steel Ltd, Essar Steel, Jindal Steel and Power Ltd and SAIL may also follow suit in increasing prices, which were last revised upwards in September.
Jayant Acharya, Director (Marketing), JSW Steel, told
“Despite rise in production cost, the company has not increased product prices due to depressed demand. Of late, the demand has improved, especially in the rural regions because of better agriculture output this season," he added.
Acharya said steel production cost has gone up Rs 400-600 a tonne on the back of the recent rise in iron ore prices by Rs 200-300 a tonne. Add to this, the price rise of $30 and $20 a tonne in HBI (hot-briquetted iron) and coking coal to arrive at the overall impact on the company, he said.
He said freight cost has also gone up substantially in recent times after the diesel price increases. On the demand front, Acharya said there has been pent-up demand from water projects undertaken by a few State governments, though there has been no major flip-up in infrastructure spending.
JSW Steel expects exports to increase 50 per cent this fiscal to 3 million tonnes (mt) against 2 mt last fiscal. Acharya said the company's capacity utilisation in Karnataka was at 80 per cent due to short-supply of iron ore. Production of iron ore in category 'B' mines is still delayed, while output from the category 'A' mines is not sufficient to meet the demand from the State.