, and & Power are expected to follow suit this week, they said.
Traders and market participants said that the primary steelmakers had sent out feelers since last week about an impending price hike.
The hike comes at a time when the margins of steelmakers have been shrinking due to lower prices and elevated input costs.
“I think prices have become quite low and at this price I don’t think too many steel companies would want to operate,” TV Narendran, the managing director of Tata Steel told ET Now Tuesday. “So there is enough cost pressure now for steel companies to also push up steel prices.”
The price of benchmark hot-rolled coil (HRC) steel has declined by about 30% from a peak of Rs 78,800 per tonne ex-Mumbai in the first week of April to around Rs 55,500-56,000 now, according to data from SteelMint. However, it remains firmly above the price of around Rs 35,000-40,000 per tonne seen in 2019.
Whether the price hike indicates the stemming of the downtrend in steel prices this year or it is only a small blip will depend on how the market absorbs this price hike, experts said.
“It will all depend on their (steelmakers’) orderbook position,” said a leading Mumbai-based trader.
However, a senior executive at a leading steel company told ET that prices going up now was “certain”. What was less certain was whether the price hikes in the coming weeks will be moderate or drastic, they said.
Experts said that steel prices in the Indian market will closely follow the prices in the international market. While tepid demand in key markets is pushing the global steel prices down, increased cost pressure due to higher energy costs and a sharp cut in production in Europe is supporting a price increase.
“The high gas prices have resulted in around $200 per tonne of increase in steel prices in Europe. There has also been a sudden and severe production cut of around 30% due to the same reason,” this executive quoted above said. While steel demand in Europe is also tepid, the factors pushing up the prices are more severe than those suppressing the prices, they said.
The price hike also reflects an increase in coking coal prices in the global market. Coking coal, a key input for steelmaking, is seeing a price recovery to around $300 per tonne after hitting lows of around $200 in early August. Coking coal prices had exceeded $600 per tonne at its peak in April this year.