India's Tata Steel, the world's sixth-largest steel firm, expects to be able to pass on virtually all of the rising cost of iron ore and coal to its customers, a top executive said. ( Reuters )
The comments by B. Muthuraman, managing director of Tata Steel, put the company in line with other Indian steel firms that have already raised or plan to raise prices despite the Indian government's efforts to keep them in check in the face of soaring inflation.
"Today we are seeing a situation of very strong growth of demand, and I believe that most of the increase in input costs will actually get transferred and translated into steel price increases," Muthuraman told reporters.
"Ultimately, I believe market forces will prevail, and there is very little one can do to arrest what will happen as to market forces," he said. "The Indian prices, I believe, will also go up with international prices."
Asked how much of the higher cost of raw materials the company would be able to pass on, Muthuraman said: "I would expect 100 per cent."
Steelmakers in countries including South Korea and China have already raised their prices in response to significant increases in the price of iron ore.
Muthuraman said Tata had no intention of buying mining resources in China, but that it was looking into opportunities in countries such as Mozambique, Congo, Senegal, Brazil, Ivory Coast and Angola, which have large deposits but no great demand themselves for the resources.