The Steel Authority of India and Rashtriya Ispat Nigam Ltd, the two largest producers of construction grade steel, have hiked the prices of structurals and rounds by Rs 1,000 per tonne and Rs 500 per tonne, to Rs 26,000 per tonne and Rs 26,500 per tonne, respectively. This is the first price hike in the industry after major manufacturers voluntarily reduced prices in August this year.

The price increase comes in the wake of strong demand and the tight supply of such products.

"This is a routine price revision. The companies take a view on market conditions every month and decide on the price accordingly. Also, since prices were rolled back in August by a similar amount, this price increase is only a reversal to the levels prevailing in August," said an expert.

Both SAIL and RINL had rolled back prices by Rs 1,000 in August, following the price cut announced by Tata Steel and other primary steel producers. Tata Steel had slashed prices of all its products by Rs 2,000 per tonne, putting pressure on other companies to follow suit.

While Tata Steel has committed itself to maintaining the prices of its products till March 2005, SAIL chairman VS Jain said last month his company would continue reviewing prices every month.

A steel stockist said, "While companies have announced price increases, premiums on the products also went up by Rs 300-400 per tonne this week, owing to the onset of the construction season." The premiums on long products currently range between Rs 1,500-Rs 3,000 per tonne, he added.

The squeeze

This is the first price hike in the steel industry after major manufacturers voluntarily reduced prices in August this year

The price increase comes in the wake of strong demand and the tight supply of such products