Why Steel Price Hike - DEC 2020

There seems to be a perception that Steel Price hike of 55% ( wrt July lows) is being charged unreasonably by Steel Producers.

Major reasons

1). The iron ore prices have gone up from $104 per ton to $168 per ton.

The increase is from $60 to $64 per ton in last 6 months.

2). In India the NMDC a PSU Company has increased prices of iron ore lumps from ₹ 2850 to ₹6040 per ton in last six months. The increase is 112%. Each 1000 rupees increase in iron ore prices will impact minimum ₹2000 per ton in steel making.

3). The scrap prices have gone up from $300 to $ 480 per month in last 3 months. The increase is nett $ 180 per ton.

4). Internationally, the Pig iron prices have gone up from $330 to $ 480 per ton. The increase is $150 per ton.

5). Internationally , the Sponge iron / DRI/HBI prices have gone up from $280 to $450 per ton. The increase is $170 per ton.

6). The ocean freight has gone up by 25% for vessels and 50% on containers.

7). The pellet prices internationally have gone up from $115 to $183 per ton. Last deal done by PSU - KIOCL is at $183 per ton.

The increase is $68 per ton. The domestic freight by trucks has gone up by 20/30%.