Tata Steel, which acquired Corus Group Plc for $12 billion in January, will raise prices for the second straight month as construction and automobile companies in India increase orders to meet demand.
Prices of long products for immediate delivery would be raised by as much as 2 per cent, or Rs 600 ($15) a tonne, from tomorrow, Deputy Managing Director T Mukherjee said in a telephone interview today.
Tata was also scouting for iron ore and coal mines in Brazil, Australia, Canada and several African countries, he said.Indian steelmakers are raising prices as demand increases in China and India, the world’s fastest-growing major economies. Tata’s decision matched yesterday’s increase by Steel Authority of India, the nation’s biggest state-run steelmaker.
The price of rebar, a benchmark long product, would go up to about Rs 26,600 in the immediate delivery market, Mukherjee said. Tata, one of the lowest-cost steelmakers in the country, faces competition for raw materials as it expands overseas and prices of iron ore and coal increase.
“Securing supplies is key to Tata Steel’s global plans as its own mines will mostly be used to meet its requirement in India,’’ said Sanjay Makhija, vice-president at Mumbai-based Fortune Financial Services.
Tata Steel agreed to buy a stake in a Mozambique coal mine in August for $86 million. The coal would be used to produce steel at its plants in Europe, Mukherjee said.“We are looking for iron ore mines for our European operations and depending on the location of the coal mine, we will decide whether to use it for operations in India or Europe,’’ he said.
Tata Steel and Corus combined produce about 25 million tonnes a year. Capacity might more than double to 56 million tonnes by 2015 after the three new plants planned in Orissa, Jharkhand and Chhattisgarh start production, Chairman Ratan Tata had said.
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