Increase in demand from the domestic automobile manufacturing companies has prompted the price of hot rolled steel to rise upwards. Acting in response to the positive sentiments in the steel market, most leading steel manufacturing companies in India are considering revising the prices of hot rolled steels. Steel Authority of India (SAIL), the largest integrated iron and steel producing company in India, has increased the prices of hot steel products by about Rs 1,500. Industry analysts believe that the market is gradually on a path to recovery.
However, it is believed that the current hike in price is also going to increase the cost of operation for several small and mid-sized steel products manufacturing units in the country. These units mainly buy hot rolled steels from large-sized players and process such steels to produce various steel products such as stainless steel scrap, stainless steel billets, stainless steel ingots and semis, stainless steel rolled bar etc.
 SMEs to be affected
Narayan Singh Solanki, Proprietor of Prayas Steel & Alloys, a mid-sized manufacturer of hot rolled steel products in Kumbharwada, Mumbai, says, “Price hike is definitely going to affect the business of the SMEs. But, it is a positive sign that the market is looking upward, which in general will benefit the whole steel industry.”
Tata Steel has also decided to hike its price of hot rolled steel by about 3-4%, following the upward surge in the market. This particular kind of steel is widely used for making different kinds of car parts and consumer durable products.
Correlating with foreign companies
According to Rakesh Parekh, Proprietor of Fortran Steel Private Limited, a small-scale steel products manufacturing unit in Maharashtra, “The rise in price is also taking place in other parts of the world. Therefore, the Indian companies should remember to correlate their prices with the prices of foreign manufactured hot rolled steels.”
Recently, the Indian automobile and two-wheeler companies are resuming normal production with demand for their products again rising in the Indian car and two-wheeler market. This has given a boost to the overall steel industry, which has been severely hit by the ongoing global economic crisis.
Anirban Guha |
