Steel may cost Rs 1,000/t more on iron ore price hike, freight

Domestic steel prices are likely to go up by around Rs 1,000 a tonne

RELATED ARTICLES

soon on the account of increase in freight charges by Railways and hike in iron ore price by National Mineral Development Corporation (NMDC), according to industry officials.

"There is a compelling case for steel prices to move up by around Rs 1,000 per tonne in the coming months as NMDC has hiked iron ore prices and the peak season charges imposed by the Railways," Rashtriya Ispat Nigam Commercial Director T K Chand told PTI.

Noting that NMDC had hiked iron ore prices by Rs 200 a tonne earlier this month, industry officials said this will translate into a Rs 320 per tonne hike in steel production cost as roughly 1.6 million iron ore is required for producing one tonne of finished steel.

In a double-whammy, the Railways has decided to levy its annual busy season charge on freight which will increase the rates by 15% between October this year and March next.

According to industry officials, transportation cost for iron ore will be increased by over Rs 300 per tonne for steel companies.

"I think, some of the cost will be passed on to the end consumer," Chand said.

An official from a private sector steel company also echoed similar sentiment.

"Of course, our production cost will go up following this. But, it is difficult to say how much of that increased cost will be passed on to end-consumers," said the official, who didn't wish to be named.

When asked whether the market will be able to absorb any hike in steel prices at a time when demand is subdued, Chand answered in the affirmative saying the market will be able to do so as demand is likely to improve from next year.

Post new comment

E-mail ID will not be published
CAPTCHA
This question is for testing whether you are a human visitor and to prevent automated spam submissions.

EDITORIAL OF THE DAY

  • The economic survey falls in step with the BJP’s election manifesto

    It’s always tough to find something wrong with the annual economic survey as it only articulates the government’s desire to set its house in order

FC NEWSLETTER

Stay informed on our latest news!

INTERVIEWS

GV Nageswara Rao

MD & CEO, IDBI Federal Life

Timothy Moe

Goldman Sachs

Chander Mohan Sethi

CMD, Reckitt Benckiser India

COLUMNIST

Arun Nigavekar

Why higher education needs innovation

India is such a great country that it creates complexity ...

Zehra Naqvi

We must overcome the fear of death

It is the biggest irony that the only thing that’s ...

Dharmendra Khandal

Jawai leopards and locals can coexist peacefully

At first glance, the Jawai landscape seems like a large ...

INTERVIEWS

William D. Green

Chairman & CEO, Accenture