After 6% rise in Jan, steel mills see room for more price hikes next month

After raising prices by five to six per cent in January, steel mills plan to do so by another Rs 2,500-3,000 a tonne in February, to bridge the gap between domestically produced and landed cost of imported steel, besides other cost pressures.Government-owned NMDC raised iron ore prices this month by 19-22 per cent, one of the steepest ever. This followed similar price hikes by private miners in Odisha due to the suspension of production at five major mines in the state, by Supreme Court order. NMDC had also raised ore prices in December, by 10-13 per cent. In calendar year 2017, the country's largest iron ore miner has raised prices 48 per cent, to match those in international markets. This has prompted steel makers to pass it on to consumers. They raised product prices by up to Rs 2,500 a tonne for January to maintain their profit margin.“Recent increase in iron ore price by NMDC and Odisha's private miners are forcing steel companies to pass on the increased cost of production. The increased cost of other raw materials like coal, refractory and electrodes are further fuelling this,” said Sajjan Jindal, chairman of the JSW Group, in a twitter post.In another tweet, he said, “With the closure of mines, people are losing jobs and the government is losing royalty. Instead of stopping iron ore production in Odisha due to non-payment of compensation by lessees, a new solution should be worked out. The government must approach the Supreme Court, considering the iron ore shortage of an additional 20 million tonnes will lead to a disastrous situation, wherein small companies will be forced to shut operations.”