Responding to cost pressure and greater demand, domestic steel producers have raised prices by Rs 1,000-1,500 a tonne across products for January. Iron ore miners have increased prices by Rs 600 per tonne and so this increases the cost of production by Rs 1,000 a tonne.
With this, domestic steel players have raised prices for the fourth consecutive month in a market in which consumption is expected to pick up after the government announced a mega push for infrastructure projects.
Re­­stocking, which was minimal earl­i­er, coupled with demand coming ba­c­k, is leading to a hike in product pr­i­c­es. Demand for domestic iron ore has gone up after the increase in global ore prices, said industry officials.
Domestic iron ore prices are estimated at around $65 a tonne as against $85-$90 a tonne for imported ore. Odisha-based miners have raised iron ore prices by around 10 per cent even as supply from the state hit an all-time high as steelmakers stocked the mineral in anticipation of a disruption when multiple mine leases expire at the end of this financial year.
The export market for Indian steel is also vibrant because global prices of metallic products such as scrap and Direct Reduced Iron (DRI) have gone up. Due to this, countries such as Indonesia, South Korea, and Vietnam are unable to export steel in the same strength since they import these metallic to make steel. This has left room for higher exports from India making steel produced more competitive than before.