Stock Market Tips, After 6% rise in Jan, steel mills see room for more price hikes next month
Steelmakers have raised prices by 5-6% for January, to pass on NMDC’s 22% increase in iron ore prices; rise in other raw materials continues
Prices of other raw materials have also risen significantly in the past six months
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After raising prices by five to six percent 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 percent, 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 percent. In the calendar year 2017, the country's largest iron ore miner has raised prices 48 percent, to match those in international markets. This has prompted steelmakers 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.
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