New Delhi, Feb 2: Consumer durables and automobiles are in for a price hike as integrated steel makers have increased steel price between Rs 2,000 per tonne and Rs 2,500 per tonne (6-8 %) on account of rising iron ore, coking coal and energy prices. The hike will take up the benchmark hot-rolled coil prices to over Rs 30,000 per tonne, depending on the grade. The country's largest steel maker, SAIL, has increased steel prices between Rs 1,500 and Rs 2,500 per tonne for all grades. The increase is even higher on long products used by the construction industry (between Rs 2,000 and Rs 2,500 per tonne). With construction activity in full swing, the move is expected to shore up the company's revenues. It will, however, increase the cost of construction — a move that may hurt home seekers. A SAIL source said the increased rates would be applicable with immediate effect. Along with other companies SAIL had also increased steel prices marginally in January, 2008. At that time, steel companies increased prices 3-5 % or by Rs 700-800 per tonne, depending on the category. Along with SAIL, Tata Steel is also understood to have increased prices of hot-rolled , cold-rolled and galvanised steel in the range of Rs 2,000 to Rs 2,500 per tonne. "Most of Tata Steel's contracts are long-term and just about 12 to 15% is sold in spot market. So the hike will have a marginal impact on the company's revenues," an industry source said.

According to sources, Ispat Industries has also increased steel prices by about Rs 2,000 per tonne, and Essar Steel by Rs 2,100-Rs 2,500 (7-8 %) per tonne. Industry experts say the latest round of price increase has come about largely on account of a steep rise in input cost. Iron ore prices have nearly doubled in the last eight to nine months and are expected to rise further when contracts come up for renewal in April. Metallurgical coke prices have also increased from $190 per tonne in January last year to over $450 per tonne now. Even in the domestic market, NMDC has increased iron ore prices by 47.5% in October last year. Steel demand has little role to play during this price hike. In fact, industry experts are expecting a slowdown in demand on account of a possible slowdown in the US economy. The latest round of price hike is the second this year. In January, steel companies raised prices marginally. In 2007, steel prices increased in initial months and then stabilised.