After galvanised steel, it may be the turn of flat and long products to trudge up north.
Prices of galvanised steel, produced by companies such as Uttam Galva, saw a jump of Rs500-700 per tonne last week to Rs48,000-50,000 per tonne.
However, flat and long steel have held around Rs39,000 and Rs36,000 per tonne since January, respectively, according to Chandresh Mehta, a prominent long product dealer in Mumbai.
Now, even these categories are expected to see prices go up by Rs500-1,000 a tonne.
Much, though, will depend on the budget.
“Companies have said that they want to increase the prices of hot rolled and flat products, but in the absence of a major demand pick up, it could be difficult,” said Mehta.
Hot rolled or flat steel products are used in automobiles and white goods such as refrigerators and washing machines, while long products are used in real estate and other construction projects.
“A push in infrastructure is very essential in the budget and if that happens, prices will definitely go up and bring momentum in the market,” said Mehta.
B Satish Kumar, managing director of Steel Exchange of India, a company promoted by Tata Steel and SAIL, outlined other industry demands. “Reduction in excise duty for a five-year period, thrust on infrastructure development and manufacturers to be allocated iron ore and coal on priority at linkage rates are bare essential for the steel sector to see some movement.”
An analyst said there is a scope for price increase, which will be beneficial for companies, but if the price hike is not absorbed by the market, this will lead to further slackening in demand.
“This is what the companies want to avoid,” he said.
A long product dealer, who also heads the steel association in Mumbai, said that post the increase in prices of galvanised products, dealers expect a revision in hot rolled and cold rolled, but that can only happen if imports are curbed through taxes.
“South Korea and Japan are exporting heavily to India, thereby keeping the prices suppressed. Hence, all eyes are on the budget,” he said.
In fact, this is hurting public sector companies more than the private sector as decision making in private sector is fast and hence, they are able to make changes in inventory and logistics instantly, said the dealer.