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Unexpected 10 percent hike in steel prices after the budget Print E-mail
Written by Hari   
Monday, 10 March 2008
New Delhi: Despite the excise reduction in the budget and Chidambaram's plea to hold the priceline, steel producers have hiked the prices by 10 percent. This is the third consecutive hike in prices of steel this year, being the sharpest and the most unexpected.

Integrated steel makers increased the price of benchmark hot rolled coils (HR coils) between Rs 1,500 per tonne and Rs 3,500 per tonne (5%-10%) on account of rising iron ore, coking coal and energy prices. Rates of hot rolled coils has increased from Rs 2,000 PMT to Rs 3,000 PMT after the budget.

Steel prices of round steel, which was about Rs 35,000 per metric tonne (PMT) before the budget, has risen to more than Rs 42,000 PMT.  The rates of sponge iron that was less than Rs 21,000 PMT before the budget have gone up to Rs 24,500 PMT.

Mr S.K. Roongta, Chairman, SAIL, in his response to the  Union Budget had said, "Higher outlays for Bharat Nirman, irrigation projects, mega power projects, rural housing, etc., will help in infrastructure development and, together with excise duty cut for auto sector, will spur demand for steel. Reduction in Cenvat from 16% to 14% will also help in containing the cost of steel, especially for construction purposes. Customs duty reduction on project imports will have a favourable impact on capital costs at a time when the steel industry is undergoing massive expansion."

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