Steel Authority of India Ltd has increased prices of long products by Rs 2,000 a tonne, reflecting a “jump” in demand for these products in the past two weeks, a company official said.
Rival Tata Steel has also increased prices by a similar margin, an official said.
SAIL has also raised prices of flat products by Rs 700 a tonne, following an increase in prices in China and many other global markets.
What’s more, another round of price increase — up to 4% — is due a week later, a rare exercise in the steel market, where prices are reviewed at the start of a month.
Long product prices have risen after a long hiatus that began with the onset of the monsoon season, which typically brings down construction activity.
“Long products demand has been jumping,” the SAIL official said, but cautioned it was still not time to celebrate. “Most of the buying is speculative. There is not much fundamental change,” he said.
Shares of steel companies remained indifferent to the news, in an indication that investors had already priced in an increase in product rates. “Real estate projects are being announced, but not many of them are taking off. Construction projects too are facing delays,” he said.
The demand for flat steel products, used in making automobiles and appliances, has been robust since January. The country’s middle class defied the spectre of job losses and salary cuts to make the most of festive discounts companies offered to boost their sales.
A year down the line, the demand for cars has sustained, and so has the demand for steel and other input materials.
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