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Indian Steelmakers may Again Hike Prices by INR 4,000 per Tonne from April 1

According to a report published in Economic Times on 26th March 2021, top Indian Steel producers like JSW Steel, Tata Steel, Jindal Steel and Power Ltd. (JSPL) and ArcelorMittal Nippon Steel may again hike prices of Hot Rolled Coil (HRC) Steel by up to Rs. 4,000 per tonne from 1st April 2021.

Domestic Steel makers Matching up with Rising International Steel Prices

The same Economic Times news report quoted an executive of one of the top domestic Steel producers that this price increase is to matchup with the rise in international market prices and also cover the rising cost of Iron Ore. This would be the 13th such price hike in domestic Steel since Covid lockdown last year.

Steel prices (HRC) at the same time last year (March-2020) were around INR 35,000 per tonne and are now around INR 56,000 per tonne (Monthly price for March 2021). The Indian Steel makers in the beginning of March 2021 lowered Steel prices by Rs. 1,000 Per MT under pressure from a budget announcement of relaxation on Steel imports (which are majorly from China). Now with prices of Steel in China rising due to rise in demand, Indian Steel makers seem to try not lose their chance to fatten profit margins.

Recently, CRISIL in a report said that top 5 Steel makers may pay-back around INR 35,000 Crore of their debts in FY-21, FY-22 combined despite their increased capital expenditure.

Iron Ore Price rise in India

Although, Domestic Steel manufacturers’ justification that they are increasing prices due to Iron-ore price rise is not totally baseless, but most of the major Steel manufacturers in India have their own captive mines which they have been given on long-term lease by the Government of India.

State-owned Iron ore producer, National Mineral Development Corporation (NMDC), on 22nd March 2021 announced a 5% hike in lump Iron ore at Rs 5,350 per Tonne and Iron ore fines were increased by 2.3% to Rs 4,210 per Tonne. During last March, NMDC iron ore prices were around Rs 3,150 per tonne for lump and Rs 2,860 per tonne for fines.