March 11, 2008: Rashtriya Ispat Nigam Ltd (RINL) has hiked TMT bar prices by Rs 5,000 per ton this month.
The chairman and managing director of RINL, P.K. Bishnoi, informed that in the first week of March, RINL had received letters from customers informing them that they were buying products through intermediaries at Rs 7,000 to Rs 8,000 higher per ton. "They also said that they were willing to pay up to Rs 5,000 per ton higher," said Bishnoi.
According to industry sources, there is a gap between market prices of TMT and RINL's prices that is causing the steep increase. The average increase in TMT bars, widely used long product is around Rs 3,000 per ton. After the increase, TMT prices, on an average, were around Rs 43,000 per ton, as per the market sources.
Regarding the steep hike in price, Bishnoi said that prices of raw material were increasing. While justifying the increase, he said that not increasing the prices would result in a shortage of supply in the market. He also explained that if investible surplus was not generated, the capacity expansion plans would be hampered.
RINL would have to generate around Rs 2,000 crore every year for capacity expansion. Moreover, the PSU is looking to expand its capacity to 16 million tons by 2020.
Source: Business Standard