Indian Steel Producers Increase Their Prices

Major Indian steel producers SAIL, JSW and Essar have increased prices of their products by up to Rs 2,500 ($55) a tonne due to rising input costs

Steel Authority of India Chairman S K Roongta announced on the sidelines of the SAIL Open Golf Tournament in New Delhi on Friday that his company was to increase its prices and private steel makers JSW Steel and Essar Steel later confirmed their price rise.

JSW Steel Director of Sales and Marketing, Jayant Acharya, said his company will review the rates again in mid-April to fix the prices for the next month.

"It is a preliminary review. We are partly offsetting the rise in raw material cost pressure," he said.

An Essar Steel spokesperson said, "The price increase is in the same range as of other steel producers. It is mainly due to steep rise in raw material prices."



The increase in prices by the companies is effective from April 1.

Indian Steel Prices Set To Rise

Indian steel prices look set to rise next month as rising raw material prices look set to take effect. JSW, Tata and SAIL all look set to increase their prices by about 10-20% according to some industry sources.

Coking coal prices have risen by over 50% over the past few months. BHP Billiton recently agreed a 55% rise with the major Japanese steelmakers for the April-June quarter.

Seshagiri Rao, Joint MD and group CFO of JSW Steel, told the Times Of India that adecision will be taken next month. "We are keeping a watch on the international pricing scenario. We will revisit our pricing structure next month." Mr Rao has also been quoted as saying: "Cost pressures are very strong at the moment. Prices are not affordable... in the short-term we have to pass through this cycle."

Blackstone Group Takes Stake In Indian Power Project

US investment company, Blackstone Group, is to acquire a 12% stake in Monnet Ispat & Energy’s Greenfield power plant to be set up in Orissa, India.

The 1050 megawatt plant is expected to cost in excess of Rs50 billion and will be funded through a mix of equity capital and debt.

Monnet Ispat is principally engaged in the manufacture of sponge, steel and ferro alloys. The Company has a combined capacity of 0.86 million tons per annum of sponge iron, 0.3 million tons per annum of steel, 0.06 million tons per annum of ferro alloys and power generation facility of 150 megawatts besides running an underground coal mine in India.

Raw Material Prices Put Indian Steelmakers Under Pressure

Rising raw material prices are putting Indian steel prices under pressure and the country’s big steel companies are currently looking at putting up prices.

Iron ore prices have surged to $142 a tonne for exports to China and onlookers suggest that export prices are a good indicator of prices to be charged domestically. Meanwhile coking coal contract prices look set to be renegotiated with prices as much as 70-80 per cent higher than last year.

Last month India increased its export duty on iron ore from 0 to 5 per cent for iron ore powder and from 5 per cent to 10 per cent for iron ore lumps.

JSW Steel are said to be looking at making a decision in the next couple of days, while Bhushan Steel are looking at price increases of around Rs1000 a tonne.

US steelmakers are said to have raised prices by around $50 (Rs2300) a tonne after increases in raw material prices.

SAIL Looking For Overseas Coal Blocks

Steel Authority of India is in talks to acquire coking coal blocks in Australia, New Zealand, Mozambique and Indonesia to achieve its production targets, according to Chairman, Mr S.K. Roongta.

Speaking on the sidelines of “Global Steel 2020”, the Fifth International Conference on Steel and Steelmaking Raw Materials, he said “We are not looking at iron ore blocks but at coking coal blocks. We could acquire these blocks either on our own or through International Coal Ventures Pvt Ltd.”

SAIL’s aim is to secure around 40 per cent of its coking coal requirements through these acquisitions.

SAIL's steel production is expected to increase from 14 mtpa last year to 56 mtpa in 2020.

Tata Advisor Calls For Ban On Iron Ore Exports

A leading advisor to India’s Tata Steel has called for exports of iron ore to be banned.

Addressing the Global Steel Conference in Goa, Amit Chatterjee, advisor to Managing Director of Tata Steel Ltd said “Increasing exports of iron ore is a disturbing trend. Exports should be banned. We don’t need to export something which God has given to us.” He added “Restrict export of higher grade iron ore. Lower grade is a different issue.”

Mr. Chatterjee also suggested that “India will have a greater usage of steel in general. There will also be increased usage of steel in construction and boom in automobile industry will add to the demand,” Mr. Chatterjee. “Every car maker in the world is in India and more are coming (leading to increase in steel demand),” he stated.

Mr. Chatterjee pointed out India’s advantages of low cost iron ore and lower labour costs and projected that India’s steel manufacturing capacity would touch 100 million tonnes by 2012; however he said that raw material supply, environment responsibility and a lack of qualified personnel are big challenges ahead for the industry.

“Youngsters prefer IT to steel industry as it pays well. Working in steel industry is not considered fashionable,” he said.