RINL May Hike Steel Prices: Report

Rashtriya Ispat Nigam Limited (RINL), the corporate entity of Visakhapatnam Steel Plant is mulling increasing prices of its product following hike in railway freight charges, a senior company official said.

The official said though it is necessary to hike steel prices, the quantum of hike and when to effect the increase has not been decided as the pricing committee of the PSU is expected to meet the CMD P Madhusudhan after he returns from abroad.

The company may undertake a hike in the price range of Rs 500- 1,000 per tonne, the official said.

"Price hike is necessary to meet the additional expenditure. We cannot say when we are going to increase the price. We will take a decision once our CMD is back," the official told PTI.

In a pre-budget move, cash-strapped Indian Railways recently hiked 14.2 per cent in passenger fares in all classes and a 6.5 per cent increase in freight rates to garner Rs 8,000 crore a year.

Federation of Indian Mineral Industries (FIMI) recently said the hike in freight rates was bound to impact consumers as iron ore is a key steel making raw material, transported through rail by almost all steel companies.

RINL is currently paying nearly Rs 1,500 crore towards freight charges to Railways and the current hike may lead to an additional burden of Rs 100 crore on the steel maker, the RINL official said.

The PSU, on an average, gets 5.7 million tonnes of iron ore from Bailadila and Kirandul in Chhattisgarh and around three million tonnes of other material such as coal and lime from other parts of the country through Rail.

Prices of Vizag Steel range between Rs 28,000- 48,000 per tonne depending on the product and quality.