Title - Domestic steel cos raise prices from Oct on rail freight hike

Following Railway ministry’s decision to hike freight rates from today, most domestic primary steel producers have raised prices of steel products on the back of increased transportation costs.“We are compelled to hike product prices since we have to shell out 400-500 rupees more per tonne of steel now after the rail freight hike,” said a source from Jindal Steel & Power Ltd.The Delhi-based company has hiked prices of some steel grades mostly in the flat segment in the range of 500-1,500 rupees per tonne.Most industry officials were of the view that though the hike was inevitable, the concern was the quantum of price hike given the current bleak demand scenario for steel in the domestic market.

The market does not have the required appetite to bear price hikes month-after-month, they said.

Slowing economic growth in the country has reduced demand for the alloy, in turn pressurising prices.

“The steel industry is already bleeding and to add to it if freight, power or tariffs are increased like this then steel companies have no options and are compelled to raise product rates,” said the Jindal Steel source. “The railway’s decision has been harsh on the steel industry,”he added.

The Railway ministry has decided to increase freight rates on the back of increasing fuel prices. Due to this, freight tariff will go up by 1.7% across all commodities. This freight revision is effective from today.

JSW Steel Ltd has also raised prices of most of its flat products between 1-2% and that of long products by up to 1%, said director (commercial and marketing), Jayant Acharya.

State-owned Rashtriya Ispat Nigam Ltd, which produces only long products that finds wide application in the construction segment, has raised prices of wire rods alone by 900 rupees per tn.

“There is a strong demand for wire rods across the country and so we have hiked prices of only this product,” said a RINL source. “Prices of all other products have been kept unchanged,” he said.

Essar Steel Ltd has also increased prices for retail customers by 1,000-1,200 rupees per tonne and is working out the price hike for its large clients, said a source close to the development.

Steel Authority of India Ltd (Sail) was not reachable for any update, while Tata Steel Ltd has not raised prices so far.