Tata Steel ups rates by Rs 500-750 per tonne

Tata Steel Ltd. | Steel & Iron Products | Metals & Mining | BSE: 500470 | NSE: TATASTEEL

22 Jun 2009 Evaluate

Tata Steel has raised prices of hot rolled (HR) and cold rolled (CR) coils, used by the automobiles and consumer durables sectors, by Rs 500-750 a tonne. This is the first increase in HR in the last eight months. The increase was on monthly contracts and was effective from the June contract. The increase was being implemented in select regions of the country.

The earlier increase announced by Tata Steel was for CR and galvanized steel. Other steelmakers are adopting a wait-and-watch approach before deciding on increasing rates. Anil Sureka, director (finance), Ispat Industries, also echoed similar views stating that the company is not doing anything this month but may take a call later next month. JSW Steel is also expected to review prices only in the month of July.

The industry is expecting a hike in import duty to 15 per cent. A proposal for imposition of safeguard duty, in the wake of cheap imports, is also pending. Steel prices had fallen by almost 60 per cent from their peak levels in July 2008. Global HR coil prices, which were ruling at $1,100 in July last year, were down to $380 a tonne till last month.

However, prices have started recovering and the world’s largest steelmaker, ArcelorMittal, has increased prices in the last 10 days to $450 a tonne in the US. The price hikes were stemming from the production cut announced across the globe. While most of the producers in India have normalised production, their global peers were still operating at less than 50 per cent capacity.

The domestic market was less affected than the international market. Domestic prices were higher than international prices before the recovery. But domestic steel producers were expected to increase prices significantly from next month, on the back of a global recovery as well as increased spending on infrastructure from the government, expected to be announced in the budget.

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